IS THIS THE BOTTOM FOR JPY???
Today FED increased interest rates by 75 basis points as expected , there were some huge movements in the FX markets.
After a first rally of USD against major currencies, there was a counter movement that suggested that the worse was over....or at least until Jerome Powell started to speak.
Powell promised further hikes down the road that might bring the funds rates to 4,6% or more.
WHAT HAPPENED TO THE MARKETS??🙄🙄
EURO-USD-----------------> SELL OFF
USD-CAD-------------------> RALLY
DXY (dollar index) -------> RALLY
So what??
Strangely enough USD-JPY did not break the 145 level!!!!
In the picture you can clearly see the different behavior of JPY compared to other currencies (I plot the USD-EUR instead of EURUSD to be consistent).
Currently USD-JPY is trading at around 1998 levels, we are very close to the high of September 1998 from which we saw a major drop to the 100 level.
Tonight at 5am (Central Europe time) the BOJ will take it's decision concerning interest rates.
These are my considerations:
🎯considering Jerome Powell speech I would have expected a rally in USDJPY that would have push the pair above 1998 highs. This didn't happen
🎯USD-JPY didn't even take out the highs made on the 7th of September and stayed within a multiday range
🎯how long can the Japan stick to his ultra low rates policy?
Althought inflation is still undercontrol in Japan the Month to month inflation seems to be rising and the strong dollar will push prices of imported goods.
My opinion is that BoJ will be soon forced to increase interest rates for fear that the inflation might start to increase as it's doing in many countries around the globe.
It's highly unlikely that the strong dollar won't spill any inflation into the Japanese economy.
After a first rally of USD against major currencies, there was a counter movement that suggested that the worse was over....or at least until Jerome Powell started to speak.
Powell promised further hikes down the road that might bring the funds rates to 4,6% or more.
WHAT HAPPENED TO THE MARKETS??🙄🙄
EURO-USD-----------------> SELL OFF
USD-CAD-------------------> RALLY
DXY (dollar index) -------> RALLY
So what??
Strangely enough USD-JPY did not break the 145 level!!!!
In the picture you can clearly see the different behavior of JPY compared to other currencies (I plot the USD-EUR instead of EURUSD to be consistent).
Currently USD-JPY is trading at around 1998 levels, we are very close to the high of September 1998 from which we saw a major drop to the 100 level.
Tonight at 5am (Central Europe time) the BOJ will take it's decision concerning interest rates.
These are my considerations:
🎯considering Jerome Powell speech I would have expected a rally in USDJPY that would have push the pair above 1998 highs. This didn't happen
🎯USD-JPY didn't even take out the highs made on the 7th of September and stayed within a multiday range
🎯how long can the Japan stick to his ultra low rates policy?
Althought inflation is still undercontrol in Japan the Month to month inflation seems to be rising and the strong dollar will push prices of imported goods.
My opinion is that BoJ will be soon forced to increase interest rates for fear that the inflation might start to increase as it's doing in many countries around the globe.
It's highly unlikely that the strong dollar won't spill any inflation into the Japanese economy.
Fulltime trader since 2018.
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