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USD/JPY:Moderate Upside Move and Anticipated Interest Rate Hikes

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The moderate upward movement in the USD Index has come to a close as investors anticipate that the Federal Reserve (Fed) will only raise interest rates once, despite Fed Chair Jerome Powell's confirmation of two rate hikes by the end of the year. This expectation has shifted market sentiment, leading to a softening of US Treasury yields, which has mirrored the trajectory of the USD Index.

As a result of this shift, the yields on 10-year US government bonds have declined significantly and are currently hovering around the 3.79% mark. This decrease in yields indicates a decreased demand for these bonds, suggesting that investors are seeking alternative assets or investments.

Despite the conclusion of the moderate upside move in the USD Index, there remains a prevailing sentiment among market participants that the price may continue to experience growth in the near future. This bias toward a long setup reflects the belief that the USD has the potential to strengthen further, thereby providing opportunities for profitable trades and investments.

However, it is important to note that market dynamics can change rapidly, and it is crucial to closely monitor economic indicators, central bank statements, and geopolitical developments to assess the sustainability of this bias and adjust trading strategies accordingly.

In summary, the recent conclusion of the moderate upside move in the USD Index, coupled with investor expectations of only one interest rate hike by the Fed and the softening of US Treasury yields, has influenced market sentiment. While investors anticipate further growth in the price, it is essential to stay vigilant and adapt to changing market conditions to make informed trading decisions.

交易進行

USD/JPY faces challenges in gaining upward momentum around 143.50 early on Monday. Consequently, the pair records its first daily loss in three sessions after retreating from its highest levels since November 2022. The US Dollar index has encountered resistance and is currently hovering near 103.00. However, the potential for further upside remains favorable as the Federal Reserve (Fed) consistently emphasizes the necessity of additional policy tightening.

Looking ahead, market participants will closely monitor the US preliminary S&P data for June, with particular attention on the Manufacturing PMI, expected to show a slight increase to 48.5 compared to the previous release of 48.4. Conversely, the Services PMI is anticipated to decline to 54.0 from the previous reading of 54.9.

Furthermore, according to a Reuters poll, a majority of surveyed economists believe that if the yen depreciates to 145 per US dollar, Japan's government and the Bank of Japan (BoJ) will intervene to halt its decline, potentially employing a stealth intervention strategy.

Regarding the Japanese Yen, soft inflation data is exerting some pressure on the currency. Analysis of Japan's inflation report indicates that the contribution from higher oil prices is diminishing, while domestic demand is making a significant impact. This outcome can be attributed to the ongoing monetary stimulus provided by the Bank of Japan, resulting in higher wages and improved domestic consumption.