Daily Analysis USDJPY - 1 Aug 2023

The Japanese Yen is being impacted by the Bank of Japan's policy shift. The BoJ Governor has granted more flexibility to the Yield Curve Control (YCC), maintaining interest rates while making bond-buying operations easier. The central bank also conveyed a strong message about possibly moving away from its long ultra-dovish policy.

Investors are anticipating the United States Manufacturing PMI for July, which will be reported by the Institute of Supply Management (ISM). The economic data is projected to continue its eight-month contracting trend, influenced by higher interest rates set by the Federal Reserve (Fed). US factory activities are expected to reach 46.5, surpassing the previous release of 46.0.

USDJPY broke the 142.00 resistance level and is now at the median level of the long bullish channel at 143.00. Meanwhile, the yields on Japanese bonds continue to rise.