JPY – The yen is trading in a narrow range below 160

Data released on Wednesday showed that Japan's corporate services price index rose 3.6% year-on-year in July, higher than the expected 3.2% and the revised 3.4% in June, while rising 0.4% month-on-month, reversing the previous month's 0.4% decline. This data helps solidify near-term interest rate hike expectations.

Reputable media outlets reported that the Bank of Japan will raise interest rates as soon as possible in September and is considering a more aggressive tightening pace than the historical pace of about twice a year. Surveys show that most economists now expect a rate hike to 1.25% in September, compared to only a minority in July.

The USD/JPY pair has been gradually rising since the beginning of the month, but has been constrained by the 100-day moving average. Last Wednesday, as the dollar weakened, the USD/JPY pair finally reversed course and fell significantly, but it should be noted that the downside potential may be limited. Near-term support levels are at 158 ​​and 157.50. The next support level to watch is 156.20, with key support at the 155 level. A decisive break below this level could trigger a new wave of declines in USD/JPY. Further supporting levels will be seen at 154 and 152.50, with the 150 level being crucial. Resistance levels are at 159.50 and the 100-day moving average at 160, with stronger resistance estimated at the 50-day moving average at 161 and 162. The key level remains at 164.

Forecasted range:
Resistance: 159.50 - 160.00 – 161.00 – 162.00 – 164.00
Support: 158.00 - 157.50 – 156.20 - 155.00** - 154.00

This Week's News Highlights:
25/8

Japan's June Leading Indicator: 116.5
Japan's June Coincident Indicator: 118.5

26/8
Japan's July Corporate Services Price Index (YoY): +3.6%

Focus:

Friday
Tokyo August CPI (07:30)
Japan July Unemployment Rate (07:30)

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