USD/JPY Pair Looks to Earn More as Market Struggle to Push Forward
According to the annalist from crypto blog BitTirbute.com that the US currency has seen a small yet significant rise following optimism from traders, the forex market has not seen that rise reflect yet. Instead, it has been a considerable struggle for bulls as they are trying to break through the barrier of the market.
For the past four days, they have been trying to control the USD/JPY currency pair's performance, trying to make the market rebound past the resistance level. Compared to the relatively peaceful performance of the rest of the market, this pair is stirring quite the storm.
While the bulls in the market are trying their best to make a break into new heights, they are currently stuck right outside the doorstep of the resistance level of 132.9. Instead, it has managed to stabilize around 131.4 as of writing.
The upward move that the market is currently making is mainly because of the impact of the strong report of non-farm US payrolls, with the Federal Reserve's to further tightening these earnings.
Conflicting Statements from Federal Reserve Chairman Bowl
The fuel to the fire for the investors looking to break through the barrier that they happen to be under is because of the speech from the Chairman of the Federal Reserve. What was initially supposed to help ease people's concerns about the economy did the opposite.
Instead of feeling more at ease with how the US is going to go forward with the current state of the economy, Chairman Bowl gave a speech yesterday that featured a variety of conflicting statements that made many investors concerned.
According to his speech, the Federal Reserve is looking to reduce inflation but is also planning to increase US interest rates. While they do say that this is backed by strong data, many have their misgivings about the speech as a whole and the message that it sent out.
Furthermore, statements from FOMC members further cemented the idea that the Fed would likely be tightening its grip through interest rates, which gave plenty of investors a good scare.
However, it isn't all bad with these statements since it is very likely that these statements are there to keep investors' gains under control. They do not want to make investors too comfortable with the current situation in the country.
Therefore, it is making a valiant effort to ensure that the overall US economy manages to completely absorb the possible damage that could come as a result of this change.
Japan has yet to choose the Bank of Japan, Governor
While the US side of the pair has been seeing considerable growth, there is not a lot of news from Japan, which has yet to even decide on a new governor for the Bank of Japan. While Kuroda was an exceptional governor, he left at the end of his 10-year period at the BoJ.
Therefore, he has left his seat empty for the time being, and many within the Japanese government have yet to decide who to make. Not only will they need to decide wisely, but they will also have to decide quickly since prices for the pair could drop.
The Prime Minister of Japan, Fumio Kishida, has stated publically that they have yet to decide on a proper replacement.
They Rising Interest Rates Can Increase Inflation
The head of Minneapolis's Federal Reserve Bank is saying that US interest rates will have to increase and catch up with wage growth. Wage growth is one of the elements that contribute to the increase in inflation throughout the US.
While the price increases that they have made have done a lot to stop inflation from rising any higher than it needs to, the truth is that the US needs to do a little more if they want to properly stop inflation from rising in the country, and for that, they will have to reduce wage growth.