USD/JPY FALLS TOWARD 156.4 AS HALF-YEAR-END FLOWS AND FED COMMENTS WEIGH
USD/JPY fell from around 157.5 to 156.4 during Asian trading as Japanese investors and exporters sold foreign currency ahead of the fiscal half-year end. The move brought the pair lower despite weaker Japanese economic data.
Japan’s August industrial output fell 1.7% month-on-month, compared with expectations for a 1.7% increase. Retail sales also slowed to 2.7% year-on-year, below the 3.3% expected, while falling 1.2% month-on-month.
On the US side, Federal Reserve President John Williams said there was no urgency to raise rates again, although he noted that another increase could be appropriate later this year. The comments added to market attention on the future US interest-rate path.
The combination of Japanese half-year-end currency flows and the latest Fed comments has kept USD/JPY under pressure. Market attention remains focused on Japanese currency flows and expectations for future Fed policy.
From a technical perspective, 156.4 has become an important near-term reference after the pair declined from around 157.5. Further direction may depend on Japanese economic data, domestic currency flows and changes in Fed rate expectations.
For market participants, the key factors remain the 156.4 level, Japanese half-year-end flows, Japan economic data, Fed rate expectations and further central-bank comments, which may provide further context for the near-term direction of USD/JPY.
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