This is a first step in moving to a tightening | 31 Juli 2023

31 Juli 2023, USD/JPY

This is a first step in moving to a tightening

USDJPY trading plan:

The BOJ is offering to buy 10-year Japanese government bonds at 1.0% and is keeping its short-term interest rate at minus 0.1% and the 10-year government bond yield around 0%. It does acknowledge that Japan is gradually escaping its inflation trap, and we are seeing signs that the Bank of Japan is going to pull back on its accommodative monetary policy settings in the months and years ahead. The prospect of an increase in yields in Japan is weighing on global yields by suggesting that Japanese investors might keep more money at home, as opposed to redeploying it into government bond markets overseas.

Investment idea: buy 141.70 and take profit 142.50.

David Johnson
Analyst of «FreshForex» company
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