USD/JPY to follow US interest rates higher
|The USD/JPY is up 3.8% since February 22 and consolidated those gains last week. The pair is set to follow the yield curve, as FXStreet’s Analyst Joseph Trevisani reports.
Key quotes
“With another vast stimulus package now law, and the pandemic ending, the economic growth potential for the US economy is very strong. The Atlanta Fed GDPNow track for the first quarter is 8.4% annualized. Unless there is a change in circumstances the 10-year yield could be 2% in relatively short order. The USD/JPY will accompany rising US interest rates.”
“The Federal Reserve meeting on March 16 and 17 is the main event in the coming week. There will be no policy developments but the first Projection Materials for the year will be issued. Any improvement in the GDP and the unemployment estimates, which is likely, will confirm the positive US economic outlook and a higher USD/JPY. Likewise, Retail Sales is a harbinger for economic growth.”
“Technically the very steep ascent in the past three weeks leaves the USD/JPY vulnerable to profit-taking sales on any statistical disappointment. But with US interest rates in a sustained rise, any USD/JPY decline will swiftly become a buying opportunity.”
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.