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USD/JPY: What’s Going With Japan; What’s The Trade? – TD

Dollar/yen  reached news highs around 111. Can it continue higher? What’s next? Here is the view from TD:

Here is their view, courtesy of eFXdata:

TD Research discusses USD/JPY outlook in light of  this week’s release of Japan Q1 GDP report which showed a slowness in Japan’s economy and adopts fading USD/JPY rallies strategically targeting a move towards 102 in 2H.

“Another notable reversal that markets are trying to sort through is the slide in Q1 Japanese GDP.

The retreat in Q1 marks the end of a roughly two-year streak without a negative print. Some are now questioning the JPY macro trade story as a slowdown in investment spending accounted for a decent chunk of the slip. We don’t think this marks the end of the JPY bullish narrative, especially as growth is only part of the story…,” TD argues.

“This backdrop alongside a steeply undervalued JPY leaves us fading rallies in USDJPY, expecting a push towards 102 in H2,” TD advises.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.