Event to watch out for today:
15:30 GMT+3. USD – GDP volume change for the quarter
USDJPY:
The USD/JPY pair remains on the defensive around 144.70 during Asian trading on Thursday. Dovish remarks from Federal Reserve (Fed) officials continue to undermine the US Dollar in the near-term. Investors await preliminary data on US gross domestic product (GDP) growth for Q2, which is expected to come in at 2.8%.
Bank of Japan (BoJ) Deputy Governor Ryozo Himino said on Wednesday that the Japanese central bank will continue to raise interest rates if inflation remains flat and will also keep a close eye on financial market conditions.
His comments echoed Bank of Japan Governor Kazuo Ueda, who said last week that recent market volatility would not derail long-term plans to raise rates. Most economists expect the BOJ to raise rates again this year, starting in December rather than October, according to a Reuters poll.
On the other hand, dovish comments from the U.S. central bank pressured the dollar against the yen. Fed Chairman Jerome Powell said that “it is time for a policy adjustment”. Markets have fully priced in the possibility of a 25 basis points (bps) rate cut in September, while the probability of a deeper rate cut is 36.5%, according to CME FedWatch Tool data.
Trading recommendation: Trade predominantly with Sell orders from the current price level
Origin: FreshForex
