Русский
USDJPY:
The Japanese yen (JPY) continued to lose ground against its US counterpart for the third consecutive day on Monday and weakened further in response to a weak flash purchasing managers’ index (PMI) for March. In addition, the overall positive tone in equity markets is seen as another factor undermining the safe-haven yen. However, the case for further interest rate hikes, supported by expectations that strong wage growth could translate into broader inflationary trends, may deter bears from aggressively betting on the yen.
In addition, the recent narrowing of the rate differential between Japan and other countries should help limit deeper yen losses. Meanwhile, the prospect of further Federal Reserve (Fed) policy easing is not helping the US Dollar (USD) to capitalise on a three-day recovery from last week’s multi-month low and could contribute to the USD/JPY pair’s decline. Traders are now eagerly awaiting the release of flash US PMI indices to give them a boost, although the fundamental backdrop seems to be leaning in favour of the JPY bulls.
Trade recommendation: SELL 149.90, SL 150.80, TP 148.40
Origin: FreshForex
