USDJPY Analysis – December-27-2023

The value of the Japanese yen has decreased, reaching over 142.5 against the US dollar. This change comes after a period of strength for the yen. Recent discussions among the Bank of Japan’s (BoJ) members, as revealed in a summary from their December meeting, included talks about when to end the bank’s extensive financial support program. However, many members feel no immediate need to take this step. One mentioned that the BoJ has enough flexibility to decide if a positive trend in wages and inflation has set in.

In a related development, BoJ Governor Kazuo Ueda has observed that Japan’s economy is gradually moving towards a stable inflation rate, although the progress isn’t yet strong enough. He mentioned that if the relationship between rising wages and prices becomes more muscular and the likelihood of reaching the 2% inflation goal consistently improves, the BoJ might consider altering its monetary policy.

USDJPY Analysis – 4H Chart