USD/JPY have experienced a negative trend during the month of April. Rather than the strong Dollar index in the market, the negative trend caused by weakening Asian economies in April. The starting level was at 111.40 for the USD/JPY parity in the beginning of April and the parity started to decrease with the second half of April. The parity tested 108.42 level on April 18, which was the lowest level of last six month in the USD/JPY parity.
Bank of Japan President Kuroda said the BOJ will continue its expansionary monetary policy. After the announcement, the weak trend continues in Japanese Yen. Stating that the Japanese economy is stronger than it was a few months ago, Kuroda underlined that it could affect inflation in the short term and that the target of two percent could be delayed if it is revalued. While the Yen request was loosening due to a decline in geopolitical risks and a decline in the flow of news, the US Treasury Secretary stated that the tax reform proposal will be announced when confidence in Trump is low. This development is also followed by the Dollar as positive.
Technically speaking, persistence above the 108.50 level is crucial for visibility of the USD/JPY's gains, with 109.60 and 110.20 levels on the rise, respectively. In the case of weak USD/JPY trading, 107.45 and 107.10 support levels can be followed. Finally, if we evaluate the first forecasts of USD/JPY parity for the month of May, there could be some recovery signals. Also, the movement of upward can be observed in the first days of May after the French elections which is an important determinant factors of global economies.
- Date: 30 April 2017 Sun 11:03
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