USD/JPY is currently trading at 111.19 with a high 111.32 and a low of 111.14 in a stagnant Tokyo open as traders have little fresh news to go on as the markets move into consolidation ahead of central bank meetings next week and US GDP this Friday.
While the BoJ is not expected to tweak its monetary policy as soon as next week’s meeting, it has certainly garnered a great deal of attention building up tot he event. However, and if we are right, it should have a positive impact on the JPY and Japanese FI market. We will send out a BoJ meeting preview in the coming days. “The Fed is still on track for two more rate hikes this year and a change in the BoJ yield control is far too early given a still weak Japanese inflation picture” explained analysts at Danske Bank.
US GDP expectations
Meanwhile, analysts at Nomura explained that the US Q2 GDP, first estimate should come in at a robust 4.6% q-o-q saar real GDP growth for Q2, “mostly driven by solid contributions from personal consumption, nonresidential fixed investment, and government consumption. Consistent with the strong labor market, personal consumption expenditure likely rose solidly in Q2 after a lull in Q1.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the 100 SMA stands flat a few pips above the mentioned Fibonacci level, while the 200 SMA continues providing a short-term support at around 110.80: “The Momentum indicator in the mentioned chart recovers within negative levels, but the RSI lacks directional strength around 36, all of which limits chances of a steeper advance, at last as long as selling interest keeps capping advances in the 111.40/50 region. Below the 110.70/80 price zone, the pair will likely resume its decline, with scope then to test the 110.00 level.”
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