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The vast majority of retail client accounts lose money when trading CFDs.
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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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USDJPY Outlook with the BOJ Interest Rate Decision

USDJPY is faced with the Bank of Japan interest rate decision ahead on Monday. 

The BOJ is still defiant about raising interest rates, but the US dollar is still under pressure. 

USDJPY - Daily Chart

USDJPY - Daily Chart

The US dollar versus the Yen is trading at 136.67 after finding support at 134. The week ahead could see further gains for the pair, with resistance at 138 and 140. 

The Bank of Japan is widely expected to stay with the negative interest rates, which put the bank at odds with the world’s other major central banks. All 47 economists in a Bloomberg survey saw no change in the BOJ’s policy settings, including its 0.25% cap on 10-year bonds. 

The Bank of Japan Governor Haruhiko Kuroda said on Friday, “raising interest rates now is not desirable.” 

“It is true that the CPI data shows significant price increases. If Japan’s labour productivity rate is estimated to be around 1%, wages must rise by about 3% for inflation to reach our 2% target sustainably.” 

Kuroda added, “Very important for the forex rate to move stably reflecting fundamentals.” His comments relate to the BOJ’s efforts to intervene in the exchange rate and strengthen the Yen. 

“Our macro-model estimates show that a weak yen has a positive impact on net exports, GDP but the benefits are uneven among sectors.” 

“Recent sharp, one-sided yen declines are absolutely undesirable.” 

For the US calendar this week, there is consumer confidence and a final GDP reading. That Is unlikely to move the exchange rate, and a Japanese inflation rate on Wednesday will have more chance of sparking movement. 

The inflation rate has risen steadily from 0.5% in January to 3.7% in October, so the trend is still upward.

Friday brings a final reading of core inflation for the eurozone, with the number likely to be close to the 5% initial forecast. The euro should continue to see a boost from the ECB comments into next week. 

The week closes out with US PCE pricing data and durable goods numbers, followed by Michigan consumer sentiment.

Last Updated: 19/12/2022

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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