Yen May Reach 115.00 Soon

2017年7月10日

USD/JPY keeps going up targeting 115.00 which may be reached in the nearest future. Market believes in USD again, and is disappointed about JPY.

Friday’s Non-Farm Payrolls only reassured the market that recent hawkish tone of the Fed was justified. This week we are going to see Janet Yellen’s semi-annual testimony in front of Congress. And the market is pricing in her even more hawkish tone, pushing USD higher. If Fed’s chairwoman is optimistic enough, USD may go further, and the largest potential it has in pair with Yen, because of the BOJ position.

The Bank of Japan has recently sent a clear message that it wouldn’t remove stimulus until inflation reached the target level of 2 per cent. And as the recent official data showed, now it’s only 0.4%. And it means the chances of BOJ tightening are really low, meaning yen has no fundamental reasons for appreciation.

For USD/JPY we have only one major barrier at 115.00. The pair may reach this level in a couple of hours, but the breach of it from the first time is doubtful. We need to hear a really hawkish tone of Yellen to see the breakthrough which open the way for a long-term pair rally.