[ad_1]
The dollar / yen had a volatile week, rising first to its highest level since December 20, then down before ending the week. The price action was mainly fueled by a decline in US Treasury yields. Traders seemed to pay little attention to the growing demand for risky badets, which pushed the S & P 500 and Nasdaq Composite indices to closing records.
Last week, the USD / JPY stood at 111,575, down 0.361 or -0.32%.
Bank of Japan
Last week, the Bank of Japan maintained its ultra-loose monetary policy after two days of political meeting, but added a new deadline, stating that "extremely low" rates would be maintained "until at least the spring of 2020" .
Policymakers cited global economic uncertainties and the risks of a scheduled rise in the consumption tax later this year, from 8% to 10%.
Economic growth is also expected to reach 0.8% this year, reaching 0.9% the following year. It projected a GDP of 1.2% for the fiscal year ending in 2022.
The BOJ also predicted that the economy would fail to reach its 2% inflation target, even in 2022. It was forecasting inflation of 1.6% for the year ended March 20 2010. It also revised downward its inflation forecast for the year until March 2021, from 1.3% to 1.4%.
US Treasury: yields fall
US public debt yields followed the decline in European rates on Wednesday after new data suggests darker prospects among German business leaders. Bond yields fell worldwide after the Ifo Institute announced that confidence in the German aftermath had unexpectedly dropped in April. The Munich-based researcher's business climate indicator fell for a seventh month in the past eight months and contradicted optimistic forecasts with an impression of 99.2. The April print was the lowest reading of the indicator since 2016.
Yields continued to fall on Friday as the US government said economic activity had risen stronger than expected in the first few months of 2019. The Bureau of Economic Analysis announced Friday that the first quarter GDP was up 3.2%, the best start to the year since 2015 and well ahead of economists' expectations for 2.5% growth.
Weekly forecasts
Price developments this week will likely be further influenced by the direction of US Treasury yields, and many events could cause returns to fluctuate, resulting in the dollar / yen.
The volatility this week could be fueled by monetary policy decisions and key rates taken Wednesday by the US Federal Reserve. Traders want the Federal Open Market Committee to keep its borrowing costs at a stable level for the third time this year. In recent weeks, policy makers have all said in their speech that interest rates are currently in the right place.
Traders should also look for the possibility of a degraded view of inflation by the Fed. In addition, some expect the Fed to define more clearly the position of their patients.
Traders will also have the opportunity to respond to US consumer confidence, the ISM Manufacturing PMI and the US Non-Farm Payroll Report.
Essentially, higher yields and increased risk demand will be bullish for the USD / JPY and lower yields will be bearish for the Forex pair.
Traders will also react to events in Europe as they continue to drive down returns.
Source link
