USD/JPY Slumps Toward Critical Support Amid Rate Check Fears
The Japanese yen's technical outlook has taken a turn for the worse as USD/JPY plunges toward critical support. According to Michael Boutros, Senior Market Analyst at StoneX Media, a rate check by Tokyo is typically followed by intervention in the market. This procedural step usually precedes action from Japan.
A recent rate check combined with Bank of Japan board member Takada's comments has lifted expectations for a rate hike this month. Takada stated that policy should stay 'nimble and data dependent.'
The Federal Reserve remains focused on inflation, particularly after the Jackson Hole meeting. Fed funds futures have repriced since a weaker than expected ADP employment report. The upcoming U.S. nonfarm payrolls release is set to be the next test.