USDJPY develops upward momentum: the dollar has become the market favourite

USDJPY remains on the upside. Powell and Ishiba supported the USD. Read more in our USDJPY analysis for 1 October 2024.

USDJPY forecast: key trading points

• The USDJPY pair has been ‘in the plus’ for the second consecutive day
• Powell’s comments have reinforced support for the US dollar
• USDJPY forecast for 1 October 2024: 144.47

Fundamental analysis

On 1 October 2024, the USDJPY rose to 144.29, marking the second session in a row with the yen declining against the dollar.

Federal Reserve Chairman Jerome Powell provided support to the US dollar with his comments, signaling that a rapid reduction of interest rates in the US is not expected. Powell indicated that the Fed might opt for a 25 basis point rate cut in its two remaining meetings this year. The Fed has shifted its outlook from a ‘hard’ rate stance to a softer, more adaptable approach, leading the market to reevaluate its position.

In Japan, political comments from Shigeru Ishiba, former defence minister, added pressure on the yen. Ishiba emphasised that Japan's fiscal policies should remain flexible, reflecting the nation's current economic conditions.

The USDJPY outlook continues to favour the US dollar, and further gains are anticipated.

USDJPY technical analysis

On the H4 chart, the USDJPY market has formed a consolidation range above 141.64. Today, on 1 October 2024, the pair broke out of this range to the upside, increasing the probability of a correction towards the 144.47 level. After reaching this level, a potential downside correction towards 143.07 (a test from above) cannot be ruled out.

If the pair continues to rise and breaks above 144.50, there is potential for a growth wave extending to the 148.30 level. Conversely, if the pair declines, the 140.80 level could serve as a support point, with a breakdown below this level acting as a signal for the continuation of the downtrend towards 137.77.

Summary

The USDJPY pair continues its upward climb, with the market favouring the US dollar over the yen. Based on today's USDJPY forecast, technical indicators suggest a strong possibility of continued growth to the 144.47 level.