- USD/JPY is printing fresh cycle highs ahead of NFP.
- Bulls eye a run into the 112 area with yen weighed by dovish BoJ.
At the time of writing, USD/JPY is near the highs of the day at 111.64 in what appears to be a final push into the Nonfarm Payrolls data.
The US dollar has picked up yet another unexpected bid ahead of a report that is likely to give some clues on whether the Federal Reserve will start to reduce monetary stimulus sooner rather than later.
The US dollar index, which measures the greenback against six major counterparts, has just made a three-month high of 92.587 after it posted its best monthly performance since November 2016.
The catalyst has been in the Federal Open Market Committee's (FOMC) unexpected hawkish shift at its lats meeting, forecasting prospects of two interest rate hikes by the end of 2023.
Meanwhile, the JPY has underperformed most currencies, weighed by a dovish position of the Bank of Japan.
''How, the JPY performs in the coming weeks vs the USD will depend on how the Fed communicates its monetary policy.,'' analysts at Rabobank argued.
''Although a couple of other factors are also likely to influence the currency pair, the widespread assumption that there will be no tightening in BoJ policy settings for some time suggests little support for the JPY from domestic policies in Japan.''
The analysts said that they have brought forward our forecasts and now see a move to 112 by the end of the year.
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.
Recommended content
Editors’ Picks
Australian Dollar remains tepid after mixed Chinese data, Fedspeak awaited
The Australian Dollar extends its losses after mixed economic data from China on Friday. The Australian Dollar struggles as Australia’s 10-year bond yield has dropped to a monthly low of 4.2%. China’s Retail Sales increased for the consecutive 15th month but the softest gain in this sequence. The US Dollar has rebounded as the Fed remains cautious about inflation and potential rate cuts in 2024.
EUR/USD: Could FOMC Minutes provide fresh clues?
The EUR/USD pair advanced for a fourth consecutive week, comfortably trading around 1.0860 ahead of the close. Progress had been shallow, as the pair is up roughly 250 pips from the year low of 1.0600 posted mid-April.
Gold looks to extend uptrend once it confirms $2,400 as support
Gold price continued to push higher last week and rose above $2,400 on Friday, gaining nearly 2% for the week. Investors will continue to scrutinize comments from Fed officials this week and look for fresh hints on the timing of the policy pivot in the minutes of the April 30-May 1 meeting.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
Week ahead: Flash PMIs, UK and Japan CPIs in focus. RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.