USDJPY – Down
Events to pay attention to today:
15:30 GMT+3. USD – Consumer Price Index
21:00 GMT+3. USD – FOMC Rate Decision
USDJPY:
The USD/JPY continues to rally near 157.15 in the early hours of Asian trading on Wednesday. Traders are adopting a wait-and-see stance ahead of key events, including the release of the US consumer price index (CPI) data on Wednesday and the FOMC monetary policy meeting and press conference.
The release of stronger-than-expected US employment data last week has reinforced expectations that the Federal Reserve (Fed) may keep interest rates on hold for longer, providing some support for the dollar. Market players will be focused on US CPI inflation data. The US CPI is forecast to increase 3.4 per cent year-on-year in May, while the core CPI is projected to rise 3.5 per cent year-on-year. The US Federal Reserve is expected to keep rates unchanged at its June meeting on Wednesday.
In terms of the yen, the Bank of Japan (BoJ) is expected to leave interest rates unchanged on Friday. Additionally, a majority of economists polled by Reuters believe the BoJ will begin to reduce its monthly bond purchases, which currently stand at around 6 trillion yen ($38 billion). Meanwhile, the interest rate divergence between the US and Japan is continuing to have an adverse effect on the Japanese Yen (JPY) against the US Dollar, creating a tailwind for the USD/JPY pair.
Trade recommendation: Trading mainly by Buy orders from the current price level.
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