USDJPY – Down
Events to watch out for today:
17:00 GMT+3. USD – ISM manufacturing index
21:00 GMT+3. USD – FOMC decision on the key interest rate
USDJPY:
The Japanese yen (JPY) suffered significant losses against its US counterpart on Tuesday and reversed most of the previous day’s sharp gains, triggered by possible intervention by Japanese authorities. The main factor behind the weakening yen is the interest rate differential between Japan and the US, which is expected to remain significant for some time. This, along with a good increase in demand for the US Dollar (USD), gave the USD/JPY pair an additional boost and contributed to strong intraday gains.
US Dollar buying continued unabated during the Asian session on Wednesday amid growing confidence that the Federal Reserve (Fed) will raise interest rates for longer, supported by incoming macroeconomic data from the US that pointed to still-high inflation. Nevertheless, the risk-off momentum – as demonstrated by the overnight drop in US equity markets and the sea of red in Asian equity markets – is providing some support to the safe-haven yen. This in turn acts as a headwind for the USD/JPY pair ahead of the FOMC’s important policy decision later today.
Trade recommendation: Trade mainly with Buy orders from the current price level
Up to $20 for each lot in real money – get a guaranteed income by connecting Cashback promotion!
You may check other analytical reviews on FreshForex website. Source: freshforex.com.
