USDJPY Chart Technical Outlook keeps marching higher ahead of the Fed, the next target is 152.00
The Bank of Japan made a historic policy shift on Tuesday, abandoning the negative interest rates but signaled a very slow normalization pace ahead. This leaves the Yen at the mercy of carry trades, consisting of borrowing JPY to exchange it for higher-yielding currencies.
Beyond that, the USD is on a strong footing on Wednesday with the market bracing for the outcome of the Fed meeting later in the day. The unexpectedly high US inflation figures seen earlier this month have stoked concerns that the interest rate projections will reveal a slower easing pace, moving to two rate cuts this year, instead of three, and also starting in July, rather than in June.
This scenario has created the perfect storm for the Yen which is slumping across the board. The USD/JPY is at strongly overbought levels but no sign of a trend shift is seen so far.
The next target is November’s high at 151.90, right below the 152.00 level that triggered
