USDJPY moved upwards quite well on Friday; investors are analyzing the statistics and moves of the Bank of Japan.
On Friday, the Japanese Yen is getting weaker against the USD. The current quote for the instrument is 109.19.
Despite some rather mixed local news, the Yen stands a good chance to recover and resume its growth. The financial world is once again suffering from trade wars: this time the USA introduced import duty for steel and aluminum from the European Union countries. The European Union, in its turn, warned the USA about possible counter measures. This entire process may force another extraordinary demand for “safe haven” assets, the Yen in the first place.
Today’s statistics from Japan showed that Final Manufacturing PMI increased up to 52.8 points in May against the previous and expected readings of 52.5 points each.
Mr. Kuroda, the Governor of the Bank of Japan, delivered his speech today and said that G7 countries should discuss trade relations in order to avoid further escalation of trade wars. According to his words, the free trade concept all around the world shouldn’t change even if some participants of the global market work to their personal advantage. When it comes to assessment of the US Federal Reserve activities, everything is rather complicated. On one hand, the American regulator continues to normalize its monetary policy and push the most significant macroeconomic indicators towards their targets. On the other hand, some of the moves made by the regulator are obviously protective and later the country’s economy may face problems with the import.
However, investors are closely watching another thing. According to the information Bloomberg released today, the Bank of Japan decreased purchases of 5- and 10- bonds for the first time since August 2017. In order to do this, the BoJ took advantage of the current market situation and waited until the bonds profitability fell to the required level. For example, on Friday the volume of purchases declined by approximately 20B Yen (183M USD). Investors are very cautious in their estimations of what is happening on the market, because the speculating public at global stock exchanges may anticipate the moves of the regulator and boost the Yen price even more. However, it would be very negative for both the Yen and the BoJ’s strategy.
Orgin: RoboForex
