Should investors be wary of further downside potential in the CAD/JPY pair following the BOC’s 0.25% rate cut?

Should investors be wary of further downside potential in the CAD/JPY pair following the BOC’s 0.25% rate cut?

05.09.2024

In the U.S. currency market yesterday, the Canadian dollar fell against the yen following the Bank of Canada’s (BOC) policy rate announcement, which, as expected by the market, cut the rate by 0.25% to 4.25%. The CAD/JPY pair fell by approximately 150 pips from 107.523 to 106.002.The downtrend along the 10-period moving average on the hourly chart continued. On the daily chart, the price has fallen from the +2σ to the -2σ levels of the Bollinger Bands, so caution is warranted regarding a continued decline.

European currencies rose as the euro strengthened against the U.S. dollar following yesterday’s release of the Eurozone’s July Producer Price Index (PPI), which improved year-over-year from the previous month’s -3.2% to -2.1%.The EUR/USD pair rose from 1.1034 to 1.1095. A rebound along the 20-period moving average (MA) on the hourly chart was confirmed. On the daily chart, the 20-period MA support line marks a critical level for determining whether the rebound will continue, so we will be watching price movements during European trading hours.

Today’s schedule includes South Korea’s real GDP at 8:00, Japan’s Monthly Labor Survey at 8:30, Japan’s foreign and domestic securities investment at 8:50, the Philippines’ Consumer Price Index at 10:00, Australia’sTrade Balance, 12:30 Thailand Consumer Price Index, 14:00 Singapore Retail Sales, 14:45 Switzerland Employment Statistics, 15:00 Germany Manufacturing Orders, 18:00 Eurozone Retail Sales,U.S. Challenger Layoffs at 8:30 PM, U.S. ADP Employment Report at 9:15 PM, Canadian Labor Productivity at 9:30 PM, U.S. Initial Jobless Claims at 9:30 PM, U.S. PMI at 10:45 PM, and U.S. ISM Non-Manufacturing Index at 11:00 PM.We should remain highly vigilant regarding the downside potential for the CAD/JPY pair, which fell following the BOC’s 0.25% rate cut.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed