Buy Yen on Friday
USD/JPY has gone too far during the last weeks. And there is still a potential to reach 114.00 ahead of Non-Farm Payrolls report scheduled for Friday. Negative emotions related to Japanese data only pour oil on flames.
If you remember, last week’s governor elections in Tokyo showed a huge defeat from Abe's party. And it means that the premier will try to win mass popularity through lower yen that is good for exporters, and ultra easy monetary policy that is good for business on the whole.
And all that builds the right environment for yen depreciation. But the factors are mostly priced-in.
And we also need to remember the market believes in strong Non-Farm Payrolls published on Friday. Recently Trump tweeted about really good job numbers. And this is in the price as well.
Thus, USD may keep rising up until Friday, but we highly recommend you to get out of the market before the jobs release. Or to sell the pair.
If NFP data turn out to be worse than expected it may trigger broad based sell-off of USD.
Under such scenario, the current levels of USD/JPY look very attractive for bears, and the next downside target is at 112.30.
If you remember, last week’s governor elections in Tokyo showed a huge defeat from Abe's party. And it means that the premier will try to win mass popularity through lower yen that is good for exporters, and ultra easy monetary policy that is good for business on the whole.
And all that builds the right environment for yen depreciation. But the factors are mostly priced-in.
And we also need to remember the market believes in strong Non-Farm Payrolls published on Friday. Recently Trump tweeted about really good job numbers. And this is in the price as well.
Thus, USD may keep rising up until Friday, but we highly recommend you to get out of the market before the jobs release. Or to sell the pair.
If NFP data turn out to be worse than expected it may trigger broad based sell-off of USD.
Under such scenario, the current levels of USD/JPY look very attractive for bears, and the next downside target is at 112.30.
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