Next week's USD/JPY and gold outlook

Next week, USD/JPY will have unclear direction and gold looks slightly bearish in the first half for now.

The biggest point is,September 11 (Fri) 21:30 US CPI.

Reason

The US employment report for September 4 was quite strong.

Non-farm payrolls were
Forecast ~+56,000 → Result +162,000

The unemployment rate was 4.1%.

A strong employment report raises expectations for Fed rate hikes again, which

supports dollar strength and higher interest rates → negative for gold

as a result.

However, USD/JPY is a bit more complex.

In the US, rate hike expectations are rising, while in Japan the Bank of Japan’s rate hike expectations are strengthening as well.

In other words,

US rate hike expectations → dollar strength
BOJ rate hike expectations → yen strength

are conflicting.

Therefore, USD/JPY is more likely to move up and down in the early part of next week rather than trend in one direction.

Next week's notable dates

September 10 (Thu) 21:30 PPI
September 11 (Fri) 21:30 CPI

If CPI is particularly strong,

USD/JPY up → gold down

Conversely, if CPI is weak,

USD/JPY down → gold up

this tends to be the case.

Summary

Early next week,

USD/JPY: neutral to mildly downside risk
Gold: slightly bearish

And,Friday’s CPI could set the next big direction for the week ahead.