The Japanese yen seems to be prepared to appreciate even more amid the hard line expectations of the BOJ

• The Japanese yen remains in a favorable position against a weaker USD for the third consecutive day.
• The bets that the BOJ will rise again and a weaker risk tone underpin the safe refuge jpy.
• The appearance of new sales of USD exerts additional bearish pressure on the USD/JPY torque.

The Japanese Yen (JPY) quotes with a positive bias against his American counterpart for the third consecutive day on Thursday and, for now, seems to have stopped the late backward recoil from the previous day from the weekly maximum. Japan wholesale inflation data published on Wednesday indicated that companies continued to transfer consumers costs and increased fears of a more rooted price increase in Japan. This is expected to keep the Bank of Japan (BOJ) on the way to increase interest rates even more, which, in turn, is considered to support the JPY.

In addition, a slight deterioration in the feeling of global risk – as indicated by a softer tone in shares markets – turns out to be another factor that benefits the jpy of safe refuge. This, together with a modest recoil of the US dollar (USD), drags to the USD/JPy torque closer to the 146.00 mark during the Asian session. Meanwhile, the optimism led by the 90 -day tariff truce between the US and China could limit the JPY. In addition, the reduction of bets for a more aggressive policy relief by the Federal Reserve (FED) could support the USD and the currency pair.

Japanese Yen bullies maintain control in the midst of bets due to an increase in boxwoods and a cautious tone in the market

• The Japan Production Price Index (IPP) published Wednesday highlighted the persistent price pressure and supports the case for a greater standardization of monetary policy by the Bank of Japan. In addition, the vice governor of the BOJ, Shinichi Uchida, reiterated that the Central Bank will continue to increase the rates if the economy and prices improve how it is projected.
• Meanwhile, investors were cautious before the publication of the US Production Price Index on Thursday and the appearance of the Federal Reserve president, Jerome Powell, later during the US session. This contributes even more to the relative yield of the Japanese Yen in front of his American counterpart for the third consecutive day.
• In the interim, an US consumer price index. This, in turn, does not help the US dollar to capitalize on the night rebound from the weekly minimum and contribute even more to the tone of sales around the USD/JPY tone.
• However, the operators have reduced their expectations of a more aggressive policy relief by the Fed following commercial optimism between the US and China, which helped alleviate the fears of recession. This could stop USD bassists to open new positions and maintain a limit on any additional appreciation movement for the safe refuge JPY.
• The president of the Chicago Fed, Austan Goolsbee, said that some parts of the April Inflation Report represent the lagging nature of the data, and will take time for current inflation tendencies to be reflected in the data. At this time, it is a time for Fed to wait more information, try to overcome noise in the data, Goolsbee added.
• Separately, the Vice President of the Fed, Philip Jefferson, said that recent inflation data is consistent with additional progress towards the objective of 2%, but the future path remains uncertain due to commercial tariffs. Jefferson also pointed out that the current moderately restrictive policy rate is in a good place to respond to economic developments.
• In addition, the president of the Fed of San Francisco, Mary Daly, said that a solid growth, a solid labor market and a decline inflation are where we want to be. Monetary policy is well positioned, moderately restrictive, and the Fed can respond to what comes to the economy, Daly added.

The USD/JPY could fall further below 146.00 and re -test the weekly minimum established Wednesday

From a technical perspective, the USD/JPY torque struggles to capitalize on the night rebound beyond the level of fibonacci decline of 23.6% of the recovery since the minimum of the year established in April. In addition, the negative oscillators in the schedules support the prospects of an additional intradication below the 146.00 mark, towards a new test of the 145.60 zone or the weekly minimum established on Wednesday. This is followed by the level of 38.2% of Fibonacci, around the region of 145.35-145.30, below which cash prices could fall to the psychological brand of 145.00 en route to the area of ​​144.70-144.65. The latter represents the resistance break of the simple mobile mean (SMA) of 200 periods in the 4 -hour graph and should act as a key point. A convincing rupture will suggest that the recent recovery since the minimum of the year has lost impulse and will pave the way for deeper losses.

On the other hand, the 146.60 zone (23.6% Fibonacci level) could offer immediate resistance before the round figure of 147,000. A sustained strength beyond the latter could trigger an intra -cut coverage rally and raise to the USD/JPY torque towards the intermediate obstacle of 147.70 en route to the round figure of 148.00. Any additional movement upwards beyond the obstacle of 148.25-148.30 could face strong resistance near the 148.65 zone, or over a maximum of a month reached Monday, which, if exceeded, should allow cash prices to recover the 149.00 mark.