Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 54.76% 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.
Important Notice - Fraud awareness
Important Notice - Scam alert
54.76% of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 54.76% 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.
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.
ATFX

FCA License No: 760555

ATFX-search-icon
Client Portal
Start trading
rch

Will USDJPY Bears dig into lower support at $121.56?

The Japanese Yen has been coveted as a route to recovery against most currencies it pairs with in the forex market, especially the US dollar. The bears took over USDJPY after attaining its all-time high at $131.26 earlier in May. The bears have significantly pushed the price down over the past two weeks to its current position at $126.73 and aiming for the next support at $121.56. The bearish takeover is driven by a weakening dollar and the improvement in the Tokyo CPI data released yesterday. Moreover, an improving level of inflation, combined with CPI data turning out lower than expected are believed to have had certain amount of influence.

Highlights from the Tokyo CPI data released yesterday

Tokyo Consumer Price Index (CPI) for May fell to 2.4% YoY against the anticipated 2.7% and previous 2.5%. This shows that the inflation rate has reduced by 0.1%.

The CPI excluding Fresh Food was 1.9% y/y against the expected 2.0%. The previous figure was 1.9%.

The Tokyo CPI excluding Food and Energy was 0.9% y/y. The figure matched the expected 0.9%.

The Bank of Japan's governor: Kuroda, observed that provided the energy prices drop sharply, the Japanese core Consumer Price Index will likely remain stable at 2% for the next 12 months. This means inflation will probably stay at its current level without further increase.

The above assurance from the Bank of Japan governor has revived confidence in the economy and opened other ways for economic growth.

What is the next step for USDJPY?

The Japanese Yen is currently very bullish because of the reduction in the inflation rate and positive economic growth. During his speech, the Japanese Prime Minister- Kishida remarked that the recent increase in costs for goods and services is driven largely by the global spike in prices for fuel and raw materials. He further stated that the government plans to proceed with efforts to help raise wages with responsibility. This indicates that a further downside is most likely expected for USDJPY prices to the next support level of $124. A price movement that falls beyond this level would suggest that the target then shifts to $121.56.

Last Updated: 27/05/2022

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.


 

Recent news

Recent news
EURUSD & GER30 fall lower as market awaits CPI flash estimate & ISM Manufacturing PMI

EURUSD prices have witnessed minor pullbacks after creating an intraday high yesterday at ...

Recent news
Weak GDP Could Sway the US Economy Into a Recession

Tonight, crucial economic data about the US first-quarter real GDP growth final annualised...

Recent news
Fears of Fed pullback arise as gold prices bounce to $1,826

XAUUSD - Gold prices rebounded from yesterday’s low of $1,820 to $1,826 during the Asian s...

Recent news
Stock sell-off before release of CB Consumer Confidence report

The stock market had experienced a significant sell-off during the Asian session today bec...

Recent news
Bitcoin meets strong support at $18,921

Bitcoin has found strong support at $18,921 after facing a severe crash in June 2022. The ...