USD/JPY broke above its 200-day moving average (148.51) yesterday and clutching its gains, BBH FX analysts report.
BOJ minutes hint at rate normalization
“The Bank of Japan’s (BOJ) July 30-31 policy meeting minutes offered a preview of the bank’s September hawkish hold which saw two members vote in favor of resuming rate hikes. According to the July minutes one member noted that the BOJ ‘should not become overly cautious and miss the opportunity to raise the policy interest rate,’ while another member argued that it was possible for the BOJ ‘to exit from its current wait-and-see stance, perhaps by the end of 2025 at the earliest’.”
“The swaps market price-in 54% odds of a 25bps BOJ rate increase to 0.75% at the next October 30 meeting. Our base case is for the BOJ to resume normalizing rates in October. Japan’s Tankan business survey points to an ongoing recovery in real GDP growth and underlying inflation is making good progress towards the BOJ’s 2% target.”
“Bottom line: we expect USD/JPY to hold under 150.00, especially considering that it’s trading well-above the level implied by US-Japan 2-year bond yield spreads.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
