Fundamental Market Analysis for December 18, 2024 USDJPY
Event to pay attention to today:
21:00 EET. USD - FOMC Rate Decision
USDJPY:
The Japanese yen (JPY) is experiencing difficulty capitalising on a modest recovery against its US counterpart from the previous day, attracting fresh sellers during Wednesday's Asian session. The latest data from Japan shows an unexpected improvement in the country's trade balance in November, driven by strong export growth. However, the data also points to weak local demand, as indicated by the decline in imports. This, along with an uncertain economic outlook amid concerns over US President-elect Donald Trump's tariff plans, confirms expectations that the Bank of Japan (BoJ) will keep interest rates unchanged later this week, which will have the effect of undermining the yen.
Meanwhile, the prospect of a less dovish Federal Reserve (Fed) decision, as well as expectations that Trump's policies could boost government borrowing and accelerate inflation, continue to support US Treasury yields. This is another factor weighing on the low-yielding JPY, although the softer risk tone helps to limit the potential for further losses. JPY bears may also choose to adopt a more cautious approach and refrain from making any significant bets ahead of a key central bank event. The Federal Reserve will announce its decision at the conclusion of its two-day meeting today, followed by the Bank of Japan's monetary policy update on Thursday.
Trade recommendation: We follow the level of 153.500, if it is fixed above we consider Buy positions, if it bounces back we consider Sell positions.
21:00 EET. USD - FOMC Rate Decision
USDJPY:
The Japanese yen (JPY) is experiencing difficulty capitalising on a modest recovery against its US counterpart from the previous day, attracting fresh sellers during Wednesday's Asian session. The latest data from Japan shows an unexpected improvement in the country's trade balance in November, driven by strong export growth. However, the data also points to weak local demand, as indicated by the decline in imports. This, along with an uncertain economic outlook amid concerns over US President-elect Donald Trump's tariff plans, confirms expectations that the Bank of Japan (BoJ) will keep interest rates unchanged later this week, which will have the effect of undermining the yen.
Meanwhile, the prospect of a less dovish Federal Reserve (Fed) decision, as well as expectations that Trump's policies could boost government borrowing and accelerate inflation, continue to support US Treasury yields. This is another factor weighing on the low-yielding JPY, although the softer risk tone helps to limit the potential for further losses. JPY bears may also choose to adopt a more cautious approach and refrain from making any significant bets ahead of a key central bank event. The Federal Reserve will announce its decision at the conclusion of its two-day meeting today, followed by the Bank of Japan's monetary policy update on Thursday.
Trade recommendation: We follow the level of 153.500, if it is fixed above we consider Buy positions, if it bounces back we consider Sell positions.
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