Japanese Yen Forecast: USD/JPY Slips toward 9-Month Lows at 144 – Where Next?

Japanese Yen Key Points

When global stock indices tank, the Japanese yen is usually a big beneficiary of the risk-off trade.
This morning’s weaker-than-expected JOLTS Job Openings survey is weighing on the US dollar.
If 144.00 gives way, a continuation toward the 13-month low around 140.75 could be next for USD/JPY.

It’s a tale as old as time for experienced FX traders: When global stock indices tank, the Japanese yen is usually a big beneficiary of the risk-off trade. After the S&P 500 saw its third-worst day since the start of 2023 yesterday (-2.1%), Asian indices saw even larger drops and European bourses saw a second straight day of selling as well.

Keying in on USD/JPY, this morning’s weaker-than-expected JOLTS Job Openings survey (7.7M vs. 8.1M expected, lowest reading since April 2021) weighed on the US dollar specifically; after Fed Chairman Powell specifically noted that the Fed would be on high alert for any further deterioration in the job market in Jackson Hole last month, this report has traders on edge ahead of Friday’s marquee NFP report (full preview article coming tomorrow morning!). As it stands, traders are pricing in nearly coin flip odds (53%/47%) of a 25bps or 50bps rate cut from the US central bank later this month, so Friday’s jobs report may be even more market-moving than usual.

Japanese Yen Analysis – USD/JPY Daily Chart

Source: TradingView, StoneX

From a technical perspective, USD/JPY has nearly reversed all of last week’s gains in just the last two days alone. The pair is currently testing previous support near the 144.00 level – if the pair finishes today under there (technically 143.96), it would mark the lowest closing price for USD/JPY since early January.

If 144.00 gives way, a continuation toward the 13-month low around 140.75 could be next, whereas only a big bullish reversal back above 147.00 would end the recent pattern of lower highs and lower lows and flip the near-term bias back to neutral.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.