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market analysis
The euro stopped falling and rebounded against the yen! Japanese importers may welcome the transaction window
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: Euro stops falling and rebounds against the Japanese yen! Japanese importers may welcome the trading window period." Hope it will be helpful to you! The original content is as follows:
On Thursday (September 11), the euro and the yen began to rebound after recording two consecutive declines. The exchange rate rose 0.26% during the European trading period, and trading around 172.89.
The slight increase in the producer price index (PPI) in August, coupled with the upward revision of GDP data in the second quarter, increased household spending and increased real wages, provided support for the Bank of Japan's upcoming interest rate hikes.
But traders seem reluctant to make big bets and choose to wait for the release of more data in the future.
At the same time, the resignation of Japanese Prime Minister Shigeru Ishiba has caused domestic political disturbances to continue to ferment. Bank of Japan officials tend to remain calm at the monetary policy meeting next week, maintaining the current interest rate level of 0.5%, and then launching policy adjustments after the signal that wage-driven inflation pressure continues to appear more clearly.
The market pricing has fully reflected this cautious position. The interest rate policies that Japanese prime minister candidates tend to be different also provide continuous disturbances to Japan's political situation. At the same time, the French vote of confidence ended on Tuesday, and the old Prime Minister Belu stepped down. In the end, Macron needs to find a new prime minister. European political disturbances have www.xmhouses.come to an end. After excluding the French crisis, the euro is expected to continue to remain strong against the Japanese yen. Japanese importers can prepare to exchange foreign exchange to prevent the euro from appreciation.
Despite the positive fundamentals, the yen bulls remained on the wait-and-see attitude
A report released by the Bank of Japan on Thursday showed that Japan's August producer price index (PPI) rose 2.7% year-on-year, a slight increase from 2.6% in the previous month. On a month-on-month basis, PPI fell slightly by 0.2%, reversing the 0.2% increase in July.
Earlier, a short-term survey released by foreign media on Wednesday showed that Japanese manufacturers in SeptemberConfidence reached its best level in more than three years. In addition, revised GDP data released by Japan earlier this week showed that Japan's annualized economic growth rate in the second quarter of 2025 was 2.2%.
Other data released recently showed that household spending has increased, and actual wages have turned from negative to positive for the first time in seven months. This retains the possibility of an upcoming interest rate hike by the Bank of Japan before the end of the year, and the expectation continues to be positive for the yen during the Asian trading session on Thursday.
In contrast, U.S. inflation unexpectedly fell, supporting market bets on the Fed's interest rate cut at next week's policy meeting. The U.S. Bureau of Labor Statistics (BLS) reported on Wednesday that the U.S. producer price index (PPI) fell to 2.6% year-on-year from 3.3% in July.
Other details in the report show that the core PPI, excluding food and energy prices, rose 2.8% year-on-year, slowing significantly from 3.7% in July, and far below the market's general expectations of 3.5%. The data has pushed up market bets on the Fed's implementation of more radical policy easing.
Risk preferences improve, but the degree of improvement still needs to be paid attention to US CPI data
The French voting for confidence was finally won 194 votes in favor and 364 votes against it. According to the relevant laws that apply to this voting of confidence, the government led by Beiru received fewer votes of support than the number of votes against it. If the voting of confidence is not passed, Macron needs to find a new prime minister and the French crisis has temporarily disappeared.
The market has almost www.xmhouses.completely digested the expectation of three interest rate cuts in the United States in the rest of the year. It also believes that the possibility of the Federal Reserve implementing a 50 basis point sharp interest rate cut at its meeting from September 16 to 17 is small, but it exists.
However, in the face of many favorable traders, they seem unwilling to make big bets and choose to wait for the US Consumer Price Index (CPI) report released at 20:30 in the North American trading period. This key inflation data will play a key role in the US dollar trend and provide important guidance for the overall risk appetite of the market.
Technical analysis:
The 14th-day relative strength index (RSI) has always stood firm above the 50 mark, indicating that the current overall bullish pattern in the market is dominant. The main support level is at the 172.63 level corresponding to the 9-day exponential moving average (EMA).
From the technical analysis of the daily chart, the currency pair is still in the upward channel pattern, and the bullish trend of the market continues.
The 14th-day Relative Strength Index (RSI) is above the 50 mark, reflecting that market sentiment is bullish. In addition, as the euro and yen have broken through the 9-day index moving average (EMA), short-term price momentum has further strengthened.
In the upward direction, the primary resistance is the psychological threshold of 173.00. If it can successfully break through this level, the euro and Japanese yen are expected to advance towards the high since July 2024 - the area around 173.91 recorded on September 8, which will challenge the resistance at about 174.10 on the upper track of the upward channel in the future. If the upper track of the channel is further broken, the bullish pattern will be strengthened, and the pair may be expected to approach 20.The all-time high of 175.43 was set in July 24.
The short-term support level may be tested first, that is, the 9-day exponential moving average (EMA), and the subsequent support will be about 171.80 at the lower track of the upward channel. If it falls below this key support range, the bullish pattern in the market will weaken accordingly, and the euro against the yen may further test the 171.28 level corresponding to the 50-day index moving average (EMA).
If the decline continues to expand, medium-term price momentum will be damaged, and downward pressure will push the pair toward the 10-week low of 169.72 recorded on July 31.
The above content is all about "[XM Foreign Exchange Platform]: Euro stops falling and rebounds against the Japanese yen! Japanese importers may usher in the trading window period". It is carefully www.xmhouses.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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