USDJPY:
President Donald Trump’s decision to postpone plans to impose trade tariffs against Canada and Mexico is having a negative effect on demand for traditional safe-haven assets. Added to this are fears that Japan will also be a possible target for Trump’s tariffs, which seems to undermine the Yen and bring the USD/JPY pair back closer to the mid 155.00s.
However, any significant depreciation in the Yen appears to be limited, as market participants anticipate that the Bank of Japan (BoJ) will continue to raise rates. This represents a notable deviation from the anticipated path of the Federal Reserve (Fed), which is expected to reduce borrowing costs on two occasions before the close of this year. Consequently, the narrowing rate differential between Japan and the US should help to limit losses for the low-yielding Yen.
Trade recommendation: Trading predominantly Buy orders from the current price level.
Origin: FreshForex
