Published on: 2023-09-11
Updated on: 2023-09-21
The yen rose on Monday after comments from BOJ governor Kazuo Ueda about the sustainability of wage increases bolstered expectations for monetary tightening.
He said it is not impossible to be convinced by the end of the year that wage hikes next spring will be likely, according to a local media.
Wage growth is seen as a crucial factor in the bank’s considerations in unwinding decades of ultra-loose monetary policy. Japan real wages extended their fall to a 16th consecutive month in July.
His comments pushed the yen higher to 146.7 per dollar. Meanwhile Japanese stock pared it earlier gains though Ueda also said the central bank is some distance away from achieving its price stability target.
The dollar capped its eighth weekly gain on Friday, the longest such run since 2005. The advance sent its 14-day RSI above 70, which is seen by some analysts as a sign of overbought.
The yen will likely lure more bulls back in if it retests the downside of the ascending channel at 140. Still we could see a break above 148 resistance level as mere talking has proved to be insufficient to drive a sustainable rally.
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