USDJPY:
The Japanese yen (JPY) continues to strengthen on Monday as traders remain cautious ahead of Wednesday’s Bank of Japan (BoJ) meeting, which could announce a possible rate hike. Markets are betting that the BoJ could raise rates by 10 basis points to 0.1% and is expected to announce plans to reduce bond purchases.
The yen may also receive support as traders may wind down their carry trades ahead of the BOJ’s decision. Japan’s chief currency diplomat Masato Kanda told G20 participants on Friday that foreign exchange (FX) volatility is negatively impacting the Japanese economy. Kanda noted the growing likelihood of a soft landing and emphasized the need to closely monitor the economy and take necessary measures, Reuters reported.
The U.S. dollar (USD) faces challenges as cooling inflation and softening labor market conditions in the United States (U.S.) have fueled expectations of three Federal Reserve (Fed) rate cuts this year starting in September.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
Origin: FreshForex
