Forex Analysis & Reviews: 13.06.2024 - A decline in US inflation...

InstaForex - Parceiro oficial da Dragon Racing

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Abertura de Conta

Veja também

Condições de Negociações

Análise Forex

Gráficos

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

Como começar a negociar

Informação útil

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

Sistema PAMM

Sistema ForexCopy

Investimentos passivos

Contas OYS

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Página Principal

Área do Parceiro

Vantagens para Afiliados

Registro

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Concursos

Eventos

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Fórums

Estamos nas redes sociais

Humor Forex

Portal Forex

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

História

Porque nos escolher

InstaSport

Regulamentação

Notícias da Empresa

Premiações

Estrelas da InstaForex

InstaForex Offline

Headquarters

Principais documentos

Responsabilidade Social

InstaForex - Parceiro oficial do Dragon Racing

13.06.2024 12:28 AM

A decline in US inflation will allow the yen to initiate a bearish USD/JPY reversal

The US Consumer Price Index declined to 3.3% on a yearly basis in May from 3.4% in April, while the core index fell even more sharply from 3.6% to 3.4%. The slowdown in inflation completely offset the effect of the strong labor market. The bond market responded with a sharp decline in yields, and the likelihood of the first Federal Reserve rate cut in September has risen significantly.

The Federal Reserve held its meeting on Wednesday. The interest rate was expected to remain unchanged, but economic forecasts and the rate trajectory were highly likely to be revised. This signals a potential weakness for the US dollar, and we expected volatility to spike following the meeting.

The Bank of Japan will hold its meeting on Friday. A 0.1% rate hike is not expected, but the Bank may announce a program to reduce bond purchases. Such a decision would be the BOJ's first clear step towards quantitative tightening after abandoning the large-scale stimulus program in March and it could be the start to policy normalization. Although the Bank states that it does not target foreign exchange rates, a change in the bond purchase regime or a clear hawkish signal would work in favor of the yen's growth.

Forecasts vary widely. If the BOJ is too cautious, the yen may weaken further and head towards the 160 level, where intervention to prevent further depreciation would likely occur. If the measures are aggressive, bond yields will rise sharply, complicating the government's ability to service its accumulated obligations.

The net short JPY position decreased by $1.75 billion to -$10.6 billion, indicating that positioning remains strongly bearish but a trend reversal is emerging. However, the price is not falling, suggesting that conditions for a bullish bias on the yen have not yet materialized.

USD/JPY is trying to resume its uptrend, which happens whenever the BOJ avoids providing specific details about its future course of actions. Japanese bond yields declined amidst growing uncertainty regarding the BOJ's plans. The substantial yield differential objectively forces the use of the Japanese currency in carry trade transactions, and this will continue until the BOJ decides to proceed with raising its rate.

Nevertheless, we believe that buying USD/JPY is too risky due to the high probability of another currency intervention. Therefore, we adhere to the same strategy – sell on rallies. If the pair rises above 159, the threat of intervention will increase significantly. While the pair remains below this level, local bullish impulses are possible.

You have already liked this post today

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.