USDJPY – Daily Chart
The price of the USDJPY is testing support at the 149 level and a failure there could lead to further losses.
Traders are betting that the Bank of Japan (BoJ) will continue raising interest rates this year in the wake of higher inflation in Japan. Data released last week showed that Japan’s core inflation touched a 19-month high in January. Additionally, the Services Producer Price Index (PPI) from Japan underlined the view that rising wages are persuading firms to pass on higher costs to customers. Hawkish BoJ expectations are also helping to power the Japanese yen.
On the USD side, markets fear that President Trump is going to sour a recession by slashing Federal worker levels and cutting spending with its efficiency drive. Overall, 75,000 federal workers accepted a resignation package and will be added to the next payrolls data. His administration also began the process of firing probationary federal employees across the country, with around 220,000 federal employees in the firing line.
The total of these two groups would mark around 300,000 workers, amounting to the “largest job cut in American history (by a mile),” according to Callie Cox, chief strategist at Ritholtz Wealth Management.
The Japanese yen is also used as a safe haven in uncertain times and that is spurring demand in a time of heavy political and economic uncertainty. Trades should be cautious with many speculative assets testing support levels and Nvidia earnings after the US market closes on Wednesday is a high-risk event that could make or break the market.
The post USDJPY Back on Traders’ Radars as Key Support is Tested appeared first on ATFX Malaysia.