CAD/JPY Holds Steady Amid Reduced BOJ Rate Hike Expectations

The Canadian Dollar vs. Yen (CAD/JPY) is currently trading at ¥111.32, showing a slight daily gain and holding above key moving averages in the short term. The probability of a Bank of Japan rate hike on October 30 has dropped to 25%, which reduces immediate pressure on the Yen and supports current CAD/JPY levels.

Markets may be overestimating future Bank of Canada tightening, as core inflation slows and excess supply persists. This raises downside risks for the Canadian Dollar if market sentiment shifts. Technically, CAD/JPY is bullish in the short term but capped in the longer term, with support at ¥110.95 from the Ichimoku Kijun.

Momentum indicators are mixed, with the MACD signaling a Buy, while the RSI is elevated at 70.92, and both the Stochastic RSI and CCI are in overbought territory. Over the next 2-3 days, CAD/JPY is expected to trade within a range of ¥110.76 to ¥111.88, with a 78% chance of a move higher and a 22% chance of a downside move.

A break above ¥111.88 could signal a renewed bullish trend, while a fall below ¥110.76 or a decisive move through the Ichimoku Kijun could trigger a retracement. Earlier, analysts noted sustained bearish pressure on CAD/JPY, but the current analysis highlights short-term resilience and potential consolidation.