Event to pay attention to today:
15:30 EET. USD – Unemployment Rate
USDJPY:
The Japanese Yen is weakened by doubts over the likely timing of the next BoJ rate hike.
The US Dollar holds near a two-year high and supports USD/JPY ahead of the US NFP report.
The Japanese Yen (JPY) is rising in response to comments from Japan’s Economy Minister Ryosei Akazawa during the Asian session on Friday, although it lacks bullish confidence amid uncertainty over the Bank of Japan (BoJ) rate hike. Data released today showed that real household spending in Japan fell for a fourth month in November, indicating that the economy is fragile. This gives the BoJ another reason to be cautious about further interest rate hikes, which could continue to undermine the yen.
In addition, the yield differential between US and Japanese bond yields has widened significantly over the past month amid the Federal Reserve’s (Fed) tightening bias. This could help push down Japanese Yen yields and serve as a tailwind for the USD/JPY pair amid a bullish trend for the US Dollar (USD). Meanwhile, traders may prefer to stay on the sidelines and wait for the release of the important US Non-Farm Payrolls (NFP) report before making aggressive directional bets on the currency pair.
Trade recommendation: Watching the level of 158.60, trading mainly with Buy orders
Origin: FreshForex
