An event to watch out for today:
16:45 EET. USD – Composite PMI
USDJPY:
The Japanese yen (JPY) is declining during the Asian session on Friday amid some repositioning ahead of the expected Bank of Japan (BoJ) decision. However, the yen’s decline seems tempered amid growing expectations that the BoJ will raise interest rates amid signs that inflationary pressures in Japan are intensifying. In fact, government data released today showed that Japan’s core consumer prices rose at the fastest pace in 16 months. Moreover, the core rate, which excludes fresh food and energy prices, remained above the Bank of Japan’s 2% annualised target for the fourth consecutive month.
Meanwhile, the prospect of further BOJ policy tightening and bets that the Federal Reserve (Fed) will cut interest rates twice this year could narrow the rate differential between the U.S. and Japan. Additionally, concerns over US President Donald Trump’s trade policies should continue to serve as a tailwind for the Yen. The US Dollar (USD), on the other hand, is languishing near one-month lows amid concerns over the interest rate implications of the Fed and Trump’s policy clash. This, in turn, favours the USD bears and may help contain a significant rise in the USD/JPY pair.
Trading recommendation: Trade mainly with Sell orders from the current price level.
Origin: FreshForex
