On Monday, the markets opened without much excitement following recent fluctuations. The Japanese Yen has corrected its course after a significant surge. Market participants are keeping a close eye on the Bank of Japan's (BoJ) next moves before making any major decisions.
The Yen saw a decrease on Monday, reaching a one-week low against the US Dollar as traders ease off their aggressive use of JPY. The BoJ's recent shift to its highest interest rate in years at around 0.25% led to a massive unwinding of the Yen carry trade, resulting in the Yen surging more than 12.5% from multi-decade lows against the US Dollar.
Market attention will turn towards US inflation data this week, particularly with the release of fresh Consumer Price Index (CPI) figures on Wednesday. Additionally, Japan's Gross Domestic Product (GDP) numbers are also expected later in the week and could provide insights into how the BoJ plans to manage growth and inflation within Japan.
USD/JPY Price Forecast:
The recovery of the Yen has caused USD/JPY to drop from multi-decade highs, pushing it below the 200-day Exponential Moving Average (EMA) at 151.84. After hitting a floor near 142.00, it bounced back to test around 148.00.
It may be premature to declare a reversal in trends for Yen pairs at this stage but there is potential for further upward movement as bullish sentiment pushes price action closer towards the 200-day EMA with support from rising trendlines maintaining positive momentum.
Disclaimer: The information provided contains forward-looking statements and serves as informational purposes only and should not be considered as an endorsement or advice for purchasing or selling assets mentioned herein.
Written by Elias Thalassos
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