JPY Bulls Let Down By Rising Unemployment Rate

BOJ on Watch as JPY Weakens FurtherThere has been plenty of chatter recently regarding a potential change of course from the BOJ. On the back of the adjustment made to its YCC target at the last meeting, some players have suggested that this lays the groundwork for a more formal policy shift in coming months. Indeed, the BOJ themselves have acknowledged that the time for a policy shift might materialise in 2024. Despite this, JPY ahs continued to weaken recently and with USDJPY pushing higher above 145, speculation over potential BOJ intervention looks to have slowed upward momentum.Japanese Jobless Rate RisesThis week, however, there has been disappointing news for JPY bulls. The Japanese inflation rate was seen unexpectedly moving higher to 2.7% from 2.5% prior and expected. The increase takes the number of jobless in Japan back up to its highest level in four months and acts as a strong counterargument to those calling for the BOJ to tighten imminently. In light of this latest development, JPY looks likely to weaken further near-term. Looking ahead this week, the big focus for USDJPY traders will be incoming US data with advance GDP, PCE and NFP all posing plenty of volatility risk.Technical ViewsUSDJPYThe rally in USDJPY has seen the market breaking above the 145-level resistance though price is currently stalled into the bull channel highs. Momentum studies have weakened here, suggesting room for a correction lower. If we do break back under 145, 142.21 is the next support to watch. To the topside, 151.81 is the longer run target while 145 holds.