USD/JPY rose into the low ¥158 range as the yen weakened. Although there was a temporary sharp decline, the yen’s weakening trend remained intact, and the concentration of buy and sell orders in the order book drew attention.
USD/JPY traded predominantly with a weaker yen yesterday, influenced from morning through afternoon by movements in US Treasury yields that supported the dollar. Trading weakened at times during the evening amid some uncertainty over the outlook, but the pair turned back towards yen weakness late at night. The ISM Manufacturing Index came in below market expectations, but no major movement in USD/JPY was observed. Expectations for rate hikes this year and next were reported following comments by Neel Kashkari, President of the Federal Reserve Bank of Minneapolis.
In today’s (2 October) technical analysis of USD/JPY, buy orders in the mid-¥156 range were considered particularly heavy on the order book and concentrated near the support line. In contrast, sell orders were heavy in the mid-¥158 range, with a resistance line said to be attracting attention around that level. Heavy buy orders around ¥156 were also noted.
In correlation analysis between USD/JPY and other currency pairs, a notably strong correlation with AUD/JPY was observed over the past 24 hours, while correlations with EUR/JPY and GBP/JPY were also seen. The latest correlation-checking tool indicated a relatively weak correlation with AUD/USD, and no inverse correlation was observed.
In an analysis of the relative strength of 8 major currencies, including the US dollar, the Swiss franc was the strongest currency recently and the euro the weakest. The yen moved between positive and negative territory, while the dollar was in positive territory as of the morning.