The USD/JPY pair has been on an upward trend for the fourth consecutive day, reaching near 157.15 during Asian trading hours. Traders are taking a cautious approach as they await key economic events that could significantly impact the pair’s movement.
One of the major events to watch is the release of the US Consumer Price Index (CPI) data, which is expected to show an increase of 3.4% Year-over-Year (YoY) in May. This data will provide important insights into inflationary pressures in the US economy and could influence the Federal Reserve’s interest rate decisions.
The Federal Reserve (Fed) is expected to keep interest rates unchanged at its June meeting on Wednesday. The stronger-than-expected US jobs data released recently has raised expectations that the Fed may maintain higher interest rates for a longer period. This could lend some support to the US Dollar and impact the USD/JPY pair.
On the other hand, the Bank of Japan (BoJ) is expected to keep its short-term policy rate steady at 0-0.1% at its June meeting on Friday. However, there are indications that the BoJ may begin tapering its monthly bond buying program, currently set at around 6 trillion yen. This could have implications for the Japanese Yen and the USD/JPY pair.
Market participants will closely monitor the outcomes of these key events to gauge the direction of the USD/JPY pair. Any surprises in the US CPI data or statements from the Fed could lead to heightened volatility in the currency pair. Traders will also keep an eye on any signals from the BoJ regarding its monetary policy stance.
Overall, the USD/JPY pair is likely to experience heightened volatility in the coming days as market participants react to the outcomes of the US economic data release, Fed interest rate decision, and BoJ policy meeting. Traders will need to stay vigilant and adapt their strategies accordingly to navigate through potential price swings in the currency pair.
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