USDJPY:
The Japanese Yen (JPY) rises against its US counterpart during Thursday’s Asian session and looks to consolidate the previous day’s modest rebound from around multi-decade lows. The increasing threat of intervention from the Japanese authorities continues to provide some support for the currency. In addition, the overnight drop in the US Dollar (USD) to near one-week lows contributed to the USD/JPY pairing near 152.00.
A report released by the Institute for Supply Management (ISM) on Wednesday showed that growth in the US services sector continued to lose momentum in March. This raises the stakes that the Federal Reserve (Fed) will start cutting rates in June, which triggered a sharp drop in US Treasury yields and had a strong impact on the dollar. Meanwhile, the Bank of Japan’s (BoJ) cautious approach to further policy tightening suggests that the gap between US and Japanese rates will remain wide.
This, along with fresh gains in stock markets, should contain a significant strengthening of the yen and limit the decline in the USD/JPY pair. Thus, the main focus will be on the release of the US Non-Farm Payrolls (NFP) report on Friday.
Trading recommendation: Trade in the 151.20-152.00 channel on a rebound from the levels.
Origin: FreshForex
