USD/JPY Weekly Forecast – US Dollar Dips Only to Find Buyers

USD/JPY Forecast Video for 27.11.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has initially fallen against the Japanese yen for the trading week, but found enough support near the crucial ¥147.80 level to turn things around and form a massive hammer. At this point, it looks like we are threatening the ¥150 level, an area that of course has a certain amount of psychology attached to it.

In general, I think this remains a “buy on the dips” market, and I do think that is probably only a matter of time before we go looking to recapture the ¥152 level, and then perhaps even higher than that. With that being the case, I think you get a situation where longer-term traders are going to continue to take advantage of the overall interest rate differential between the 2 currencies, allowing the market to be one of those situations where every time it dips, you look for “cheap US dollars.”

The Bank of Japan is nowhere near tightening monetary policy, despite the fact that some people think that they may actually do that. The debt load of the Japanese economy is simply far too heavy for higher interest rates to be able to be tolerated. The Bank of Japan knows this, most professionals know this, but yet we still play the game that occasionally Bank of Japan Gov. Ueda will come out and pretend like they might do something. Even if they did raise interest rates slightly, the interest rate differential between most economies in Japan is still wide enough to drive a truck through, so it will continue to favor going against the Japanese currency.

For a look at all of today’s economic events, check out our economic calendar.