Correlation between USDJPY and stock markets | 20 Mei 2022

20 Mei 2022, USD/JPY

USDJPY trading plan:

The Federal Reserve is not targeting equity markets in its battle against inflation, but that is "one of the avenues" where the impact of tighter monetary policy will be felt, Kansas City Fed President Esther George said. The rout marked one of the worst days for U.S. stocks since the onset of the coronavirus pandemic, with major indices down 4% or more. Equity markets have been volatile since the start of the year as investors absorbed the implications of higher inflation and the rising interest rates the Fed will use to fight it. George's comments reflect an emerging discussion over how the pain of adjusting to high inflation will be distributed across the economy, with some analysts conjecturing that the U.S. central bank will need - or want - more of a hit to household wealth through equity prices, which also influences household spending, and less of one to income and jobs. This is a good signal for the stock market and USDJPY, which has a correlation with the shares.

Investment idea: buy 127.52 and take profit 128.14.

David Johnson
Analyst of «FreshForex» company
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