9 Jan 2014
USD/JPY losing momentum ahead of non-farm payrolls
FXstreet.com (London) - USD/JPY crept higher overnight, but is running out of steam with little in the way of macro news over the Asian session to drive the pair.
FOMC minutes committed to tapering, but thin on forward guidance
The pair has been in a steady bullish trend since falling to USD103.89 on Monday. Resuming the bullish trend on diverging monetary expectations, USD/JPY held on the Fed minutes released last night, with little controversial to drive and change in momentum from the pair.
The minutes showed that the FOMC is increasingly confident about the economic outlook for the US, and less wary about removing the QE stabilisers. However, the minutes showed that the decision to taper the Fed’s USD85bn of monthly asset purchases was partly concerns about the diminishing effectiveness of the programme, noting that: “"(a) majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue." The tone of the minutes suggest that it will take a major negative macro event to disrupt QE tapering, however the FOMC may backload heavier cuts to later in the year to prevent an overly hawkish message.
USD/JPY remains bullish, losing momentum before non-farm payrolls
USD/JPY is currently trading at JPY104.8735 after selling on any moves above JPY104.900. With eyes now on tomorrow’s US non-farm payroll numbers, the pair may struggle to find the momentum in the short-term to challenge last week’s three-and-a-half year high at JPY105.4415, while the broader USD/JPY trend remains bullish on diverging monetary expectations between the two central banks.
FOMC minutes committed to tapering, but thin on forward guidance
The pair has been in a steady bullish trend since falling to USD103.89 on Monday. Resuming the bullish trend on diverging monetary expectations, USD/JPY held on the Fed minutes released last night, with little controversial to drive and change in momentum from the pair.
The minutes showed that the FOMC is increasingly confident about the economic outlook for the US, and less wary about removing the QE stabilisers. However, the minutes showed that the decision to taper the Fed’s USD85bn of monthly asset purchases was partly concerns about the diminishing effectiveness of the programme, noting that: “"(a) majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue." The tone of the minutes suggest that it will take a major negative macro event to disrupt QE tapering, however the FOMC may backload heavier cuts to later in the year to prevent an overly hawkish message.
USD/JPY remains bullish, losing momentum before non-farm payrolls
USD/JPY is currently trading at JPY104.8735 after selling on any moves above JPY104.900. With eyes now on tomorrow’s US non-farm payroll numbers, the pair may struggle to find the momentum in the short-term to challenge last week’s three-and-a-half year high at JPY105.4415, while the broader USD/JPY trend remains bullish on diverging monetary expectations between the two central banks.