USD/JPY Stops Its Uptrend While Under 137.50

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Mixed Factors have negatively affected the JPY, but propelled the USD/JPY during a moderate recovery in the request for the United States Dollar. The sudden increase in the US Treasury yield increases the US-Japan interest rate differentials. Also, some other positive risks upbeat burdened the JPY. Besides this huge difference in monetary policy between the BoJ, and that of the Federal Reserve aided this as well

Recently, the BoJ reportedly announced that it will maintain easy policy adjustment. This is contrary to the hawkish statement made by the officials of the Fed. Their statement portrays that the US will continue to tighten its monetary policy. Also, Federal Reserve officials supported further interest rate increase.

USD/JPY Stops its Uptrend while Under 137.50 as Risk Correction Restrains USD

Additional Factors Influencing the USD/JPY Price
Additionally, the reducing inflation forces in the US have caused investors to reduce their prediction concerning the Fed rate hike come next month’s Policy gathering. Also, last Wednesday it was disclosed that the CPI for July  was constant as the US PPI declined. And, this occurred for the 1st time ever in 24 months. Furthermore, this is portraying that inflation could have reached its highest point. This increased the uncertainty surrounding how large the coming rate increase should be. Consequently, this will influence the price of the USD/JPY.

However, anticipation is still that the United States central bank will increase its interest rate by 50 basis points come next month. In addition to this, the new purchase last Thursday backs prospects of more short-term gain in the USD/JPY. Traders are now expecting the publication of  United States Michigan’s CSI. Adding this to the United States bond and wider risk feeling may give some direction to USD/JPY price dynamics.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.