USDJPY Analysis September 2024

In September 2024, the USDJPY pair showed significant movement driven by monetary policies and economic data from both the United States and Japan. The pair remained in a tight range for most of the month, with market participants carefully watching central bank decisions and global economic trends.

Key Drivers:

1. Federal Reserve Policy: The US Federal Reserve’s decision on interest rates was a major driver of USDJPY performance. As inflation remained a concern, the Fed was expected to maintain its hawkish stance. However, any indication of a pause or softer approach to rate hikes would result in downward pressure on the USDJPY pair, as investors shifted away from the dollar.
2. Bank of Japan (BoJ) Stance: The Bank of Japan’s ultra-loose monetary policy continued to weigh on the yen. With no major changes expected from the BoJ in terms of interest rate hikes, the yen remained weak compared to the US dollar. Market participants were closely monitoring any changes in BoJ’s stance, especially as inflation in Japan showed signs of accelerating.
3. US Economic Data: Strong economic data from the US, particularly employment figures and inflation reports, supported the dollar’s strength, keeping the USDJPY on an upward trajectory. However, any signs of economic slowdown or weakening inflation could prompt a shift in sentiment.

Technical Outlook:

USDJPY traded within the 145-149 range in September, with resistance near 149 acting as a barrier for further upward movement. Support around 145 offered a key buying zone for traders. A breakout above 149 could see the pair push toward 150, while any downside would likely be contained by the 145 level.

Recommendation: For short-term traders, buying on dips near support (145) and selling near resistance (149) is a practical approach. Long-term investors may continue holding USDJPY positions, as the US dollar remains fundamentally strong against the yen due to differing monetary policies.