Usdjpy Trades Green Before Fedspeak

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Usdjpy Trades Green Before Fedspeak

Usd/Jpy Trades Above 155.50 Ahead Of Fedspeak

The USD/JPY is seen trading in the green near the 155.80 handle on Monday. This marks the 3rd day in a row that the USD/JPY has closed the day in green.

The upside seen in the USD/JPY is stemming from the recently released Japan Q1 GDP, which came weaker than forecast. Up ahead are the Fed speakers, such as Bostic, Mester, Jefferson, and Waller, who will share their views.

The FOMC minutes are also due which could provide some information on how the Fed is approaching the inflation and rate cuts issue. On Friday, the CPI from Japan is due that can also impact the USD/JPY pair.

CPI Report Confirms Disinflation In Process

Last Friday, Fed Bostic said that he saw signs of a cooldown in the inflation. He added that the CPI report made it clear that the disinflation trend is on its way. However, he added the need to watch more data from May & June to confirm that the disinflation trend is still on its path.

Meanwhile, Fed Tom Barkin highlighted the need to keep the rates high for a long period of time. He also commented on how the inflation is moving down towards the target range.

Fed Mester added that the policy doesn't need any changes and is well-positioned. He believes that it is still too early to say that the slowdown of inflation has stopped or changed course.

Fed Tom Barkin also maintained a similar tone on how higher rates are needed to ensure that inflation is controlled and brought down towards the 2% target.

The bottom line is that the USD/JPY will likely turn higher as the rate difference between the currencies is still too wide. After all, the BoJ only left its negative rates policy a few months ago, in March. Once the rate difference between the two currencies gets thin, only thencan the JPYn turn higher against the USD.

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