Buying the Retreat in USD/JPY as the USD Starts to Reverse Again
USD/JPY surged higher after the Bank of Japan failed to impress markets with a decisive move earlier this week, but retreated after the FED also did the same. Although it is reversing back up now after dipping just below 150.
The USD turned bearish yesterday after the FED refrained from hinting on another rate hike and continued to slip lower today as well. Short-term Treasury rates were declining, helping to drag the USD down. However, markets have not slowed, with the S&P opening with a gap higher and continuing to approach the session high, up 1.5%.
Many of the highly shorted firms are on the rise, with Shopify up 20% following results. Paypal and Tesla are up 6% as well. The latest rally in broad stocks has been distinct from prior rallies spurred by large tech. These names are often trailing, although shortened names and value are increasing.
This comes ahead of two significant data releases on Friday: nonfarm payrolls and the ISM services index. Weak readings would reaffirm the bond bid and keep equities rolling, but there are dangers both ways, since another bout of strength mi. In terms of the dollar, I’m wondering whether this last wave of gains isn’t causing some anxiety in the equities market ahead of those data releases and AAPL results.
On Tuesday, he took a minor step toward less aggressive policies, which has helped to support the yen. Reuters reported earlier today that the BOJ will “look to exit the decade-long accommodative regime sometime next year,” but it will be difficult. Six persons knowledgeable with BOJ thinking were interviewed for the study. “Given uncertainty over the economic outlook, the BOJ probably wants to wait at least until spring next year in normalising policy,” according to a second source. “If so, it makes sense to keep the BOJ’s guidance dovish.”
The goal is to do it gradually. So far, the practice has been to leak major moves before announcing smaller ones, which has kept both the currency and bond markets on edge. The news today pushed USD/JPY beyond 150.00 and down to 149.85, but it has since recovered to 150.44. A large amount of that is due to the US dollar’s general weakness following the Fed and Treasury refunding announcement.
USD/JPY Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
SaveBest Forex Brokers
| 🥇 |  | Minimum Deposit $100 |  |
| 🥈 |  | Minimum Deposit $5 | |
| 🥉 |  | Minimum Deposit $25 | |
| 4 |  | Minimum Deposit $200 | |
| 5 |  | Minimum Deposit $5 | |
| 6 |  | Minimum Deposit $200 | |
| 7 |  | Minimum Deposit $1 | |
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals