USDJPY pair, Daily chart
The USDJPY pair fell as low as ¥129.50 a dollar in Tuesday’s Asian trading session before recovering to near ¥130.40 during the European session.
The pair has been on a downtrend momentum since topping near ¥152 level on October 21, 2022, driven by a less hawkish tone by the Fed’s policymakers together with an unexpectedly hit of a more hawkish tone by the Bank of Japan in early December, which increased expectations that it could tighten its ultra-loose policy in 2023.
Forex traders will also have one eye on the minutes from the Fed’s December policy meeting, due to be published on Wednesday, looking for any signals on whether the central bank intends to slow its pace of interest rate hikes further this year.
Federal Reserve hiked interest rates by 50 basis points in December following four consecutive 75 basis point increases, and markets will be keen to gauge the likely trajectory of monetary policy in 2023.
U.S. policymakers are widely expected to hike interest rates by 25 basis points when they meet in February, amid increasing signs that U.S. inflation has peaked from summer 9% highs to lows of 7% last month, and robust U.S. macroeconomic and labor data.
Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.