USDJPY:
USD/JPY went into a corkscrew on Monday, pulling back seven-tenths of a percent below 157.00 as markets return to mid-ranges ahead of the mid-week New Year’s holiday close. The holiday session is in full swing and volumes in the broad market remain low.
The Bank of Japan (BoJ) is fighting a hopeless battle to reverse the two-year decline in the Japanese yen using every tool at its disposal except raising interest rates. In March 2024, the Bank of Japan canceled its negative rate policy, then took a half-step toward raising interest rates to 0.25% before freezing rates again. No one is sure exactly what data will convince the BOJ to raise rates again, but the Japanese central bank has vowed to continue its data-dependent approach to interest rates.
Trade volumes in both Japan and the U.S. are down as markets go on New Year’s break midweek and then the calendar turns to 2025. The US will start the new year on Friday with fresh manufacturing Purchasing Managers’ Index (PMI) data from ISM, with little else of note until then.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
Origin: FreshForex
