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Forex market analysis: 9 January 2025

The Japanese yen has seen limited movement between the 157.763 and 158.553 range against the U.S. dollar, despite wage data coming in better than expected. While the wage growth beat offers some optimism, real wage growth remains slightly negative, dampening its impact on monetary policy expectations. Rate Hikes to be Expected Later At its most recent meeting, the Bank of Japan (BoJ) kept its interest rates unchanged as anticipated. However, Governor Kazuo Ueda delivered a dampened hawkish tone during the press conference, tying future rate hikes to sustained improvements in wage trends, with more clarity expected by March or April.

The market has now priced out the possibility of a January hike, focusing instead on the next BoJ meeting in March. Despite the wage data beat earlier today, such a cautious stance has limited the upside potential of the Japanese yen. Mixed Technical Signals in an Uncertain Market

Picture: USDJPY consolidates near 158.04, testing support as bearish momentum emerges following resistance at 158.55, as seen on the VT Markets app. With still a hawkish stance and the strength of the U.S. dollar weighing most currency pairs down, the Ninja has seen a slight dip of 0.17%. USDJPY closed at 158.036 after testing resistance near 158.55, reflecting indecision and uncertainty in the market. Macro Factors Affecting the Japanese Yen Such directionless movements reflect broader market caution, driven by mixed signals from the U.S. dollar and global bond markets. Concerns over the potential policy changes by the BoJ also added volatility, with traders awaiting clarity on interest rate trends. While rate cuts remained largely unchanged in the United States, Federal Reserve Governor Christopher Waller reiterated that the pace of easing will be driven by inflation data. That being said, both the NFP data tomorrow and the CPI report next week is expected to play major roles in shaping interest rate expectations.

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Publication date:

2025-01-09 12:14:58 (GMT)

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