The Japanese and erosion and part of Tuesday ascending movement in a positive risk tone

• The Japanese Yen attracts some sales intradic on Wednesday, although he lacks continuation.
• Divergent expectations between the BOJ and the Fed should limit the USD/JPY in the middle of a contained USD price action.
• The operators also seem reluctant to the Tokyo CPI and the US Personal Consumption Expenditure Index (PCE) on Friday.

The Japanese Yen (JPY) dropped during the Asian session on Wednesday after the publication of the Japan Services Producer Price Index (PPI), which was reduced to 3.0% year -on -year in February. This, together with a generally positive tone around the shares markets, undermines the Yen as a safe refuge and raises the USD/JPy torque above the psychological level of 150.00 in the last hour. However, any significant depreciation of the JPY seems elusive amid the bets that strong salary growth would support consumption and filter into wider inflationary trends, which should allow the Bank of Japan (BOJ) to continue increasing interest rates.

The hard line perspective was reaffirmed by the minutes of the January Boj meeting published on Tuesday, which showed that those responsible for the policy discussed the rhythm of increasing interest rates. This marks a great divergence compared to the forecast of the Federal Reserve (FED) of two rate cuts of 25 basic points in 2025. The reduction resulting from the rate differential between Japan and the US should act as a tail wind for the least yield, which, together with the contained price action of the US dollar (USD), limits the USD/JPy torque. Operators could also choose to wait for the publication of the Tokyo CPI and the US Expenditure Price Index (PCE) of the US on Friday.

The Japanese Yen is undermined by a positive risk tone; Bets due to an increase in Boj rates should help limit deeper losses

• The Bank of Japan reported earlier this Wednesday that the service producer price index (PPI) – an advanced indicator of the inflation of the Japan services sector – increased 3.0% compared to the previous year in February. The reading was slightly lower than the 3.1% increase in January. In monthly terms, the index remained flat during the month reported after falling 0.5% in January.
• In addition, the governor of the Boj, Kazuo Ueda, reiterated that the Central Bank will continue to increase interest rates if economic and pricing developments move in line with the projections made in the quarterly perspective report. To this is added that significant salary increases for the third consecutive year keep expectations of more rates increases by the Japanese Central Bank.
• In contrast, the Federal Reserve said last week that it would deliver two rate cuts of 25 basic points by the end of this year. Meanwhile, the Fed raised its inflation projection, although it reviewed the growth perspective in the midst of the growing uncertainty about the impact of the aggressive commercial policies of US President Donald Trump.
• Trump is expected to announce retaliation tariffs – that compensate for taxes on US assets and that they will enter into force on April 2 – on approximately 15 important commercial partners of the USA.
• The growing pessimism about the US economy led to a strong fall in the confidence of the US consumer, which fell for the fourth consecutive month in March. The Board Conference Survey also revealed that the Expectations Index fell to 65.2, the lowest level in 12 years and well below the 80’s threshold that generally indicates a recession ahead.
• This, in turn, caused a modest recoil of the US dollar from a maximum of almost three weeks reached on Tuesday and weighed strongly over the USD/JPY torque. The Usd Alcistas failed to obtain relief from the hard line comments of the governor of the Fed, Adriana Kugler, who said that progress towards the return of inflation to the 2% target has slowed since last summer.
• Several Fed officials are scheduled to speak in the next few days and play a key role in the influence of USD price dynamics. Meanwhile, the operators will be attentive to the publication of the orders for lasting goods from the USA on Wednesday in search of a short -term impulse. However, care is still focused on the US Personal Consumption Expenditure Index (PCE) on Friday.

The USD/JPY needs to find acceptance above the level of 151.00 to support the additional profits prospects

From a technical perspective, the break this week above the simple mobile average (SMA) of 200 periods in the 4 -hour graph was seen as a key trigger for upward operators. In addition, the oscillators in the daily chart have begun to gain positive traction and suggest that the lower resistance path for the USD/JPy torque is upwards. However, the failure of the previous night before the level of 151.00 justifies some caution. Therefore, it will be prudent to expect a sustained force and acceptance above that level before positioning itself for an extension of the recent recovery from a minimum of several months. The subsequent ascending movement could raise cash prices beyond the monthly maximum, around the 151.30 zone, towards the round number of 152.00.

On the other hand, the 149.55 area, or the minimum of the previous night, now seems to protect the immediate fall, below which the USD/JPY torque could slide towards the level of 149.00 en route to the support of 148.75-148.70. The latter coincides with the SMA of 100 periods in the 4 -hour graph, which if it breaks could change the bias in favor of the bearish operators. Cash prices could then accelerate the fall to the round figure of 148.00 and slide even more towards the region of 147.35-147.30 before eventually falling below the level of 147.00, towards the area of ​​146.55-146.50, or the minimum of several months reached on March 11.