The US dollar is strong due to the preliminary agreement in US-China trade talks and growing geopolitical risk between Israel and Iran. However, there is also selling of US dollars after weak US CPI and PPI data.
We think much of the effects from geopolitical risk are already included in the price, and this week the main focus will be on policy meetings by the Bank of Japan and the US Fed.
In the Japanese Ministry of Finance’s currency report on the 5th, there was a comment that they hoped the weakness of the yen would be corrected by the Bank of Japan’s policy tightening. So there’s a strong chance the Bank of Japan may raise interest rates at its meeting this week.
Even if there’s no change at the meeting, Japanese CPI is expected to increase by the weekend, which may make the yen stronger.
Meanwhile, there are growing expectations that the Fed may cut interest rates soon due to weak US economic data.
We think selling of USD/JPY may continue as the interest rate gap between the two shrinks — with the Bank of Japan possibly raising rates and the Fed cutting them.
Today’s USD/JPY forecast range: 143.20 to 144.50 yen
This week’s USD/JPY forecast range: 142.00 to 145.80 yen (76.4%)
Note: This information does not guarantee profits. Please make your own decisions when trading.