USD/JPY: After the statement of the Prime Minister of Japan Shinzo Abe

USD/JPY: After the statement of the Prime Minister of Japan Shinzo Abe

27 July 2016, 14:26
PCM-Brokers
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TRADING RECOMMENDATIONS

 Today, the yen has fallen sharply on the currency market after Japanese Prime Minister Shinzo Abe announced the decision to announce on August 2 in the amount of the program to stimulate the economy more than 28 trillion yen. The Japanese stock index Nikkei Stock Average on the basis of trading in Asia rose 1.7% to 16,664.00 points, while the USD / JPY pair shot up to around 106.50.

Also as part of the package of incentives Abe, Japan's government may announce plans to issue 50-year bonds.

This is one of the largest stimulus packages of the economy measures since Abe took over as prime minister of Japan for more than three and a half years ago.

Uncertainty in the world economy becomes stronger over the yen and Japan's weak macroeconomic indicators and the low level of inflation in the country forced the authorities to seek a solution to a difficult situation.

Now, investors will be watching the meeting of the Bank of Japan, which ended on Friday.

The Bank of Japan is under pressure from the government and the need to ease monetary policy.

Today at 18:00 (GMT) will be published on the Fed's decision on interest rates in the United States. Feed rates, located at 0.5% are expected. However, if the Fed will signal to tighten policy at the September meeting, it could push the dollar up.

Futures on interest rates Fed indicate a 20% chance of a rate hike in September, compared to 12% earlier this month. The probability of a rate hike in December is about 50%.

Keep coming out positive US macroeconomic indicators, as well as easing concerns about the negative consequences of the UK exit from the EU, more and more are beginning to convince some investors that the US Federal Reserve will not refrain from raising rates this year.

Thus, the fundamental nature of the incoming information may give grounds to assume further growth of the pair USD / JPY.

 

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