We had a big downdraft in USD/JPY and yen crosses more generally yesterday with a number of factors in play. I mentioned in the wrap:
Wage data from Japanformer Bank of Japan executive Hideo Hayakawa Bank of Japan saying rates are going to move higher than the market expects,Bank of Japan Policy Head Kazuhiro Masaki indicated further rate hikes as underlying inflation accelerated towards the Bank’s 2% goal,economy minister Akazawa spoke of further efforts to boost wages and eliminate Japan’s deflationary mindset.Link for more on these:
A note from Rabobank says:
The market consensus that the BoJ will hike interest rates again this year at an extremely modest pace is being testedYes, the modest pace looks like it will turn more rapid. May is firming for another BoJ rate hike.
Rabobank's USD/JPY forecast is 145.00.
***
ps. We get a BoJ speaker today:
Yen traders note - BoJ hawk Naoki Tamura is scheduled to speak on ThursdayBank of Japan Board Member, Tamura Naoki at a meeting with local leaders in Nagano at 9.30 am Tokyo time:0030 GMT / 2030 US Eastern time***
USD/JPY up
Something I didn't mention yesterday is the potential for JPY to play a 'safe haven' role as Trump tariffs and China retaliation escalates. The USD has been a tariff play, that may diminish a little in favour of the yen.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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