EURJPY Technical Analysis – The pair is experiencing a sharp decline, breaking below the key support level of 159.37. The Relative Strength Index (RSI) indicator is showing a bearish momentum, suggesting that the downtrend may persist. Our outlook is that the pair will continue to fall towards the next support level at 158.32, which coincides with the lower boundary of the bearish flag pattern. This pattern indicates a potential continuation of the previous bearish move.
Japan’s 10-Year Bond Yield Remains Low
The interest rate for Japan’s 10-year government bonds stayed below 0.7%. This was close to the lowest level in about three months. It followed the trend of US bond yields, which also went down.This happened because US policymakers said that they do not plan to raise interest rates anymore and they might lower them next year. This made investors think that the Federal Reserve is more relaxed about the economy.
In Japan, a Bank of Japan official said that the country still has low inflation, even though the prices are going up. He said that the wages are not increasing enough to make people spend more. He also said that the Bank of Japan should not change its policy of keeping the money supply very high, which is what other officials have said before. Investors are waiting for the inflation data from Tokyo this week, which will give them an idea of how the prices are changing in the whole country. The Bank of Japan confirmed that it will continue its policy of keeping the money supply high and controlling the yield curve in its October meeting.