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The vast majority of retail client accounts lose money when trading CFDs.
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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Japanese Yen Awaits Inflation Response From Federal Reserve

The US dollar versus the Japanese yen has found some resistance at the 143.50 level, and that could lead to further losses in the greenback this week.

The first piece of market-moving data will be Tuesday’s inflation rate from Japan, while the Federal Reserve's interest rate decision will take centre stage on Wednesday.usdjpy chart 0-Sep-19-2022-08-17-57-91-AM

USDJPY 4 Hour Chart

The USDJPY now trades at the 143 level and there is support at the 141.50 level. However, a move below that could open up a path to the July highs around 139.40.

Japanese inflation rose to 2.6% in August after being stuck at the 2.5% level for three months. If there is a further increase in the rate, then the yen could stage a rally. However, the Bank of Japan will likely still prove stubborn in tightening its monetary policy. Central banks such as the BOJ are happy to sit back and let the likes of the Federal Reserve tighten liquidity in the global markets.

Markets are expecting another 0.75% interest rate hike from the Fed on Wednesday, but some analysts have said that a 1% move is possible. If the bank hikes by 0.50-0.75% and adds some dovish statements about the future path of rates, then the dollar could see a sell-off.

Analysts at ING bank said:

"Since the Fed has remained quite hawkish in recent commentaries and may not have any interest in pushing back excessively hawkish pricing at its September meeting (it has instead pushed back against rate cut expectations recently), it may mostly be up to the data to force any dovish re-pricing at this stage."

The West Australian newspaper noted that the week ahead will see a "500 basis point global assault".

The US economy has remained strong throughout the tightening cycle, and it does not seem that the central bank will feel pressured to change course. The threat of currency intervention by Japanese officials means that the upside in the USDJPY pair is likely capped at the recent highs of 145.

Last Updated: 19/09/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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