An event to look out for today:
17:00 GMT+3. USD – ISM Manufacturing Index
USDJPY:
The Japanese yen (JPY) ended its four-day losing streak and rose against the US dollar on Tuesday. However, the yen faced headwinds as weak Japanese industrial production data fueled speculation that the Bank of Japan (BoJ) may postpone further rate hikes.
Japan will allocate ¥989 billion to fund energy subsidies in response to rising energy prices and associated cost of living pressures. This government intervention could potentially contribute to higher inflation. The Bank of Japan’s (BoJ) hawkish stance on monetary policy has been further reinforced by the recent rise in Tokyo’s inflation rate. Meanwhile, Japanese companies reported a sharp rise in capital spending in the second quarter.
The decline in USD/JPY may be contained as the US dollar strengthens amid rising Treasury yields. Traders will focus on upcoming US employment data, particularly the August Nonfarm Payrolls (NFP), for more information on the possible timing and scope of the Fed’s rate cut.
Trading Recommendation: Watch the level of 146.60, if the level strengthens above, we take Buy positions, if the level rebounds, we take Sell positions.
Origin: FreshForex
