USDJPY – Down
USDJPY:
The USD/JPY pair traded in positive territory for the fourth consecutive day around 155.60 in the early hours of Asian trading on Thursday. However, concerns over further intervention from the Bank of Japan (BoJ) are likely to limit the decline in the Japanese Yen (JPY) for the time being.
At their April monetary policy meeting, BoJ board members decided to keep the key interest rate at 0%. The Bank of Japan’s (BoJ) Summary of Opinions indicates that BoJ board members were more aggressive at the April meeting. Many called for the interest rate to be kept steady to avoid the risk of inflation outperformance. The statement emphasised recent comments by BOJ Governor Kazuo Ueda indicating the prospect of multiple rate hikes in the coming months, as well as the possibility of an increase in short-term borrowing rates.
Japan’s chief currency diplomat Masato Kanda made a verbal intervention early Wednesday, stating that he would take appropriate action if necessary to prevent the yen from rising. However, Kanda declined to comment on the currency intervention. The possibility of further steps by the Japanese authorities to prevent their currency from rising could boost the yen and limit the pair’s gains.
On the other hand, the monetary policy gap between the US and Japan continues to support USD/JPY. Meanwhile, Boston Fed President Susan Collins stated on Wednesday that the interest rate is likely to remain elevated for a long time, as it will take longer than previously thought to bring inflation down to the target level. Aggressive remarks from Fed officials have the effect of strengthening the dollar and serving as a tailwind for the pair. Additionally, on Friday, market participants will be monitoring the University of Michigan’s preliminary consumer sentiment index, which is anticipated to decline to 76.0 in May from 77.2 in April.
Trade recommendation: Trading predominantly Buy orders from the current price level.
Our company provides an opportunity to earn income not only from your trading. By attracting clients within the affiliate program, you can get up to $30 per lot!
You may check other analytical reviews on FreshForex website. Source: freshforex.com.
