USDJPY Finally Breaks Above 150, As Japanese Inflation Falls

USDJPY finally made the decisive move yesterday, breaking above the round level as safe haven currencies such as the CHF and JPY got hammered. Buyers have been trying to break above the 150 level recently but many global factors have been keeping the uncertainty high for currencies, however, yesterday the bullish break came. The CPI consumer inflation also fell, which gives no reason for the Bank Of Japan to raise interest rates further.

The USD/JPY has climbed over 10 cents recently. The 100-day Simple Moving Average (SMA), represented by the red line at the 150 mark, initially acted as a resistance level, preventing further gains. After briefly dropping to 149, the pair rebounded quickly, reflecting strong buying pressure and renewed interest in the USD.

This buying momentum was further fueled by Japanese Prime Minister Ishiba’s stance on the yen. He has refrained from urging the Bank of Japan to pursue additional rate hikes, as the Japanese economy remains weak, and inflation is declining, as confirmed by today’s Tokyo Core CPI data. Breaking above 150, the pair has crossed a significant threshold, signaling a potential trend reversal and strengthening the bullish outlook for the USD/JPY.

USD/JPY Chart Daily – The 100 SMA Has Been Broken Too

Japan’s inflation rate is showing signs of moderation, with the headline and core inflation both lower than the prior readings, but the core-core CPI continues to rise steadily. This suggests that while food and energy prices may be stabilizing, broader price pressures are still persistent, which go in line with the Bank of Japan’s monetary policy to keep rates on hold.

Bank of Japan September Core CPI

• Headline CPI:

  • Increased by +2.5%, matching expectations.
  • Previous month’s figure was higher at +3.0%, indicating a slowdown in overall inflation.

• Core CPI (excluding fresh food):

  • Rose by +2.4%, slightly above the expected +2.3%.
  • Previous month’s reading was higher at +2.8%, signaling a moderation in price increases.

• Core-core CPI (excluding fresh food and energy):

  • Increased to +2.1%, beating expectations of +2.0%.
  • Previous reading was +1.9%, showing a continued rise in underlying inflation pressures, excluding volatile items like food and energy.

USD/JPY Live Chart

USD/JPY