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USDJPY:
The Japanese yen (JPY) attracted buyers for the second consecutive day and strengthened to a new one-week high against its US counterpart during the Asian session on Thursday. Expectations that strong wage growth could boost consumer spending and contribute to higher inflation give the Bank of Japan (BoJ) room to raise interest rates further. This has led to a recent sharp narrowing of the rate differential between Japan and other countries, which continues to support the low-yielding yen.
In addition, uncertainty over US President Donald Trump’s trade policy and its impact on the global economy, as well as geopolitical risks and the political crisis in Turkey, are contributing to inflows into the Yen. The US Dollar (USD), on the other hand, is struggling to gain meaningful momentum amid increased economic uncertainty amid US President Donald Trump’s trade tariffs. This, in turn, is weighing on the USD/JPY pair and contributing to the intraday decline.
However, interest rate differentials, the Bank of Japan’s loose monetary policy, the trade balance differential and global market sentiment put pressure on the Japanese yen. The further direction of the USD/JPY pair lies on the upside.
Trading recommendation: BUY 148.40, SL 147.60, TP 150.10
Origin: FreshForex
