USD/JPY Analysis: For the First Time This Year, the Rate Exceeds 149 Yen Per Dollar

<img src="https://fxopen.com/blog/en/content/images/2023/09/Japanese_Yen.jpg" alt="USD/JPY Analysis: For the First Time This Year, the Rate Exceeds 149 Yen Per Dollar" /><p>The reason for the stable trend, as we have repeatedly pointed out, is the difference in the monetary policy of the USA and Japan. Inflation in Japan has been above 2% for more than a year, and the media are increasingly publishing expert opinions that the Bank of Japan will raise short-term interest rates from the current -0.1% at the end of this year. However, today Reuters published the opinion of Mr. Makoto Sakurai, the former head of the Bank of Japan. According to him:<br>→ the Bank of Japan may delay ending negative interest rates until around April next year;<br>→ the abolition of negative rates, which have been in place since 2016, will not harm the economy;<br>→ uncertainty about the economic prospects of the United States and China also gives the Bank of Japan a reason to delay raising rates, Sakurai added.</p><p>That is, the existing gap in monetary policy may continue for another six months, which will push the USD/JPY rate higher and higher. And it is not surprising that, as the chart shows, today the rate exceeded 149 yen per US dollar for the first time in a year, further increasing the likelihood of reaching the psychological level of 150 yen.</p><figure><img src="https://fxopen.com/blog/en/content/images/2023/09/262.png" alt="USD/JPY Analysis: For the First Time This Year, the Rate Exceeds 149 Yen Per Dollar" loading="lazy" width="2000" height="1099" srcset="https://fxopen.com/blog/en/content/images/size/w600/2023/09/262.png 600w, https://fxopen.com/blog/en/content/images/size/w1000/2023/09/262.png 1000w, https://fxopen.com/blog/en/content/images/size/w1600/2023/09/262.png 1600w, https://fxopen.com/blog/en/content/images/size/w2400/2023/09/262.png 2400w" sizes="(min-width: 720px) 720px" /></figure><p>Wherein:<br>→ before breaking through the level of 148.5 yen, the price tested the level of 147.5. Judging by the rapid recovery on September 22, demand has confidently outstripped supply;<br>→ the price has reached the upper limit of the ascending channel – it is permissible to assume that demand will weaken, as the bulls will want to take profit. Moreover, the RSI indicator shows it is overbought;<br>→ the weakening demand is facilitated by fears that exceeding the level of 150 yen will force the Ministry of Finance to intervene (as it did last fall).</p><p>If we witness even verbal concern from the Japanese financial authorities, this could rapidly lower the rate at the lower border of the channel shown by the blue lines.</p>