Bank of Japan board member Sato backed further interest rate hikes but declined to say when the next one would land, according to Kyodo. USD/JPY barely moved on the comments, holding in a narrow range between its 100- and 200-hour moving averages below and resistance near its 200-day moving average above.
Sato backs hikes, flags consumption risk
Sato expressed concern about weakening personal consumption while avoiding any specific timing for the next rate increase, according to Kyodo. According to Kyodo: "Agrees with the policy of adjusting (the policy interest rate) in stages", aligning Sato with the Bank of Japan's existing stance.
The message leans hawkish on direction but cautious on pace. Sato supports further rate hikes, yet the consumption concern suggests the timeline still depends on how households respond. Higher rates can help contain inflation, but they also weigh on household spending.
USD/JPY holds a tight range
USD/JPY has shown little reaction to Sato's comments, with the day's low at 157.78 and high at 158.24, and the pair trading near 158.08. The Asia-Pacific session low stalled near the 100-hour moving average at 157.84 and the 200-hour moving average at 157.75, which now mark the key downside barometer.
Staying above that area keeps the advantage with buyers. However, a sustained move below it would shift the technical bias toward sellers and open the door to 157.112, the previously broken 38.2% retracement, and the 156.36–156.726 swing area.
Resistance caps the topside
On the upside, the 50% midpoint of the move down from the July 23 high sits at 158.419, just below the 200-day moving average at 158.508, forming a resistance zone buyers need to clear and hold above. A sustained break higher would put the 159.02 September swing highs, the 159.54 100-day moving average, and the 159.726 61.8% retracement in play.
Sato's support for further hikes leans supportive of the yen and, by extension, points toward a lower USD/JPY. Yet her caution on timing tempers that signal, and the dollar side of the pair still has a say in the next move. For now, sellers need a sustained break below the hourly moving averages to take control.
Source: Investinglive
Trading involves risk.
Risk Disclaimer
