- The lower house of the Japanese parliament gave its approval to Kazuo Ueda.
- On Friday, the BOJ nominations will be put to a vote in the upper house.
- Japan’s gross domestic product (GDP) increased by an annualized 0.1% in Q4.
Today’s USD/JPY outlook is bearish. On Thursday, the lower house of the Japanese parliament approved the government’s choices for the position of future central bank governor and deputy governor. This ushered in a new administration tasked with ensuring a seamless transition away from ultra-loose monetary policy.
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On Friday, the nominees will be put to a vote in the upper house. The ruling coalition holds the majority of seats in both houses. Therefore approval by both houses is widely regarded as a done deal.
With the decision, the government’s choice for governor of the BOJ, Kazuo Ueda, will officially succeed Haruhiko Kuroda, whose second five-year tenure ends on April 8.
On April 27–28, Ueda will preside over his first policy meeting, during which the board will present closely-watched, new quarterly growth and price predictions covering fiscal 2025.
According to updated figures, Japan’s economy narrowly avoided a recession in the fourth quarter of 2022. It barely expanded on weak consumption after contracting in the third quarter. This highlights the difficulty facing authorities trying to stabilize a shaky recovery.
The post-pandemic recovery of the world’s third-largest economy has been weakened by record-high inflation and declining global growth amid widespread monetary tightening across many countries.
Japan’s gross domestic product (GDP) increased by an annualized 0.1% from October to December. This was significantly less than economists’ median forecast of a 0.8% increase and below the earlier estimate of a 0.6% increase.
USD/JPY key events today
Investors will pay close attention to the initial jobless claims report from the US that will show the state of the labor market.
USD/JPY technical outlook: Bears threaten to take over
The 4-hour chart shows USD/JPY in a bearish move that has broken below the 30-SMA support. The price has been trading above the 30-SMA, indicating that bulls were in control. However, bears are now challenging the 30-SMA, and the RSI has crossed below the 50-level.
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If bears close below the SMA, the price will likely fall to the next support at 135.51. However, if the SMA holds firm, bulls will return and push the price to the 138.00 key resistance.
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