Japanese efforts to turn the USD/JPY bull turn around have been a little too successful, ING’s FX analysts Francesco Pesole and Chris Turner note.
USD/JPY set to be back to the 137/138 area
“They exposed a ‘fast money’ community that at the start of July had been exceptionally short Japanese Yen (JPY). And as is the case with carry trade strategies, a trend that was years in the making was reversed in a heartbeat. We think positioning is better balanced now and that a further drop will be orderly.”
“Our call is that USD/JPY will revert to being driven by macro factors rather than by position adjustment. Lower growth and US rates, plus the Bank of Japan on a path to higher rates (next hike in October) should drag USD/JPY back to the 137/138 area.”
“More Trump comments on the need for a weak USD are also a risk.”
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
EUR/USD trades modestly flat above 1.0900 ahead of German ZEW data
EUR/USD trades flat above 1.0900 in the European session on Tuesday. The pair treads water amid a broad US Dollar consolidation. Traders take a breather ahead of the German ZEW data, US Producer Price Index release and Fedspeak.
GBP/USD rises above 1.2800 after UK data
GBP/USD gains traction and edges higher above 1.2800 in the European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate declined to 4.2% in the three months to June from 4.4%, helping Pound Sterling find demand.
Gold price drifts lower as traders await US inflation data for cues about Fed's rate-cut path
Gold price (XAU/USD) attracts some sellers in the vicinity of the monthly peak tested earlier this Tuesday and erodes a part of the previous day's strong gains of more than 1%.
Curve DAO price is set for a rally following a break above the descending wedge pattern
Curve DAO price broke out of the falling wedge pattern on Monday and trades up by 0.26% to $0.303 on Tuesday. On-chain data shows rising daily active addresses, indicating increased blockchain usage, which could signal a potential rally in the coming days.
Investors' focus set on PPI and CPI
In the US we get PPI numbers for July at 14.30 CET. Analysts expect both the headline and core figures to stand at 0.2% m/m. The measure could provide the market with early clues on how inflationary pressures have developed into the late summer.