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It's Time To Buy Yen

Published 06/30/2017, 07:06 AM
Updated 07/09/2023, 06:31 AM
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The market has focused on one key issue — the tone of central bankers' comments. That's why we have seen euro and pound rising, while the yen fell against US dollar.

The ECB and the BOE adopted a more hawkish position than the market expected, the Fed didn't surprise by the words "gradual rate increase", and the BOJ keep saying it's too early to remove the stimulus.

However, the USD/JPY moves on Thursday make us think the reversal is coming. Weaker-than-expected GDP coupled with decreasing Personal Consumption point to a subdued inflation pressure. And it means the Fed has no reason to rush with further rate increases.

On Friday, we'll see a series of reports from Japan and the USA. Stronger Japanese inflation coupled with weaker Chicago PMI and Personal Spending from the US may support the USD/JPY selloff with the nearest target at 111.00 once 111.70 support is broken.

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