USD/JPY Rate Vulnerable to Further Losses as Bearish Series Develops

Japanese Yen Talking Points

USD/JPY stays underneath pressure, with a Yen mostly unfazed by a churned information prints entrance out of Japan, and a sell rate might continue to connect forward of a Federal Open Market Committee (FOMC) seductiveness rate preference on Jun 13 as it triggers a uninformed array of reduce highs lows.

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USD/JPY Rate Vulnerable to Further Losses as Bearish Series Develops

Image of daily change for USDJPY

Updates to Japan’s Gross Domestic Product (GDP) news should keep a Bank of Japan (BoJ) on lane to serve enhance a change piece as a final reading shows a 0.6% contraction in a enlargement rate, and Governor Haruhiko Kuroda and Co. might lift a Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control into a year forward as acceleration continues to run subsequent a 2% target,

However, a singular greeting to a uninformed total advise USD/JPY will continue to take cues from Fed process as a new pullback coincides with a debility in U.S. Treasury Yields, and a uninformed updates from a Federal Open Market Committee (FOMC) is expected to impact a near-term opinion for dollar-yen as generally as Chairman Jerome Powell and Co. oath to proviso out a forward-guidance for financial policy.

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Keep in mind, Fed Fund Futures are now display squeezing expectations for 4 rate-hikes in 2018, with a benchmark seductiveness rate seen finale a year around a 2.00% to 2.25% threshold, and some-more a same from a FOMC might keep USD/JPY underneath vigour as marketplace participants scale behind bets for a some-more assertive hiking-cycle.

With that said, small to no changes in a longer-run seductiveness rate foresee (dot-plot) might moderate a seductiveness of a greenback, with USD/JPY during risk of exhibiting a some-more bearish function over a near-term generally as both cost and a Relative Strength Index (RSI) destroy to safety a bullish formations from progressing this year.

USD/JPY DAILY CHART

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  • USD/JPY stands during risk for serve waste as it carves a uninformed array of reduce highs lows after unwell to make a run during a May-high (111.40).
  • Waiting for a tighten subsequent a 109.40 (50% retracement) to 110.00 (78.6% expansion) segment to preference a pierce behind towards 108.30 (61.8% retracement) to 108.40 (100% expansion), with a subsequent downside segment of seductiveness comes in around 106.70 (38.2% retracement) to 107.20 (61.8% retracement).

For some-more in-depth analysis, check out a Q2 Forecast for a Japanese Yen

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— Written by David Song, Currency Analyst

Follow me on Twitter during @DavidJSong.

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