In the early Asian session on Friday, June 6th, the US dollar rose against the Japanese yen, trading around 143. As of 10:45 Beijing time, the US dollar was quoted at 143.88 against the Japanese yen, up 0.27%. The previous trading day saw the US dollar close at 143.49 against the Japanese yen.
Japanese Wage Data and Inflation Impact
The latest salary data in Japan reveals a “stark contrast”: nominal wages rose by 2.3% year – on – year in April, marking the fastest growth rate in four months. However, real wages, excluding inflation factors, have declined by 1.8% for the fourth consecutive month. This highlights that the increase in prices continues to erode residents’ purchasing power.
Market Expectations and BOJ Policy
This structural contradiction is reshaping market expectations. Shinichi Sato, an analyst at the Toyo Keiresearch Institute, pointed out that although the accelerated growth of nominal wages provides a basis for the Bank of Japan to exit its ultra – loose policy, the continuous contraction of real income may force the central bank to remain cautious and adopt a “slow and steady” interest rate hike strategy.
Despite the continuous growth of market expectations for further interest rate hikes by the central bank, the yen exchange rate has not been significantly boosted. This reflects that investors are still concerned that Japan’s interest rate differential disadvantage with major economies will be difficult to reverse in the short term. The Bank of Japan is currently grappling with a difficult balance between the normalization of monetary policy and economic reality. How the “scissors gap” between wages and inflation evolves will become a key indicator influencing the policy direction in the second half of the year.
Technical Analysis of USD/JPY
The area of 143.60 – 143.50 currently forms direct support. If it breaks through, the USD/JPY pair may fall to the 143.00 mark. If it is clearly broken below this level, it will reverse the short – term bullish tendency, drag the spot price to the area of 142.40 – 142.30 (or the weekly low set the previous day), and further extend towards the May monthly volatility low (the area touched last Tuesday, 142.10). If the sell – off persists and breaks below the 142.00 mark, it will become a new bearish trigger signal, and the spot price may resume the recent downward trend since the volatile high in May.
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