The USD/JPY exchange ratio is soaring, recently hitting ¥161.73 – a peak akin to 1986 figures. Some attribute this to traders’ focus on the Ichimoku Conversion Line which stands at the same point as local resistance and may become support at ¥161.29. A possible short-term deceleration in the USD/JPY upward trajectory is predicted due to a possible technical correction.
Having surpassed the threshold on June 12, the price has been consistently riding on the higher edge of the Ichimoku Conversion Line. Notable resistance comes into play at ¥161.29 and a more significant ¥164.50 – a high from November 1986.
Japan’s service activity has experienced a decline, the first such downturn in nearly two years. This has been attributed to a reduction in domestic demand.
Revisiting 1986: USD/JPY exchange rates soar
Concurrently, the Bank of Japan is set to launch a novel series of notes in 10,000 yen, 5,000 yen, and 1,000 yen denominations.
There are signs of a potential rise in the NZD/USD pair, having escaped downtrend resistance despite a decline below the 200-day average. It is expected that trading volumes will decrease before US trading begins, thus necessitating a close watch on this pair for possible surges in the exchange rate.
The US manufacturing PMI for June has seen a slight drop, dipping to 48.5 from 48.7 according to ISM figures. Yet, the US Dollar continues to strengthen. A notable occurrence has been the surge in Microsoft’s stock value, which has led to former CEO, Steve Ballmer, being classified as the world’s sixth wealthiest person.
Statements on inflation returning to decrease by Federal Reserve Chairman, Jerome Powell have injected optimism into views on US rate cuts. This has encouraged Asian stocks to venture towards a historic closing of the S&P 500. This expected shift in US monetary policy has investors expressing confidence in an economic boost.
