28 March 2022, USD/JPY
USDJPY trading plan:
Money markets are assigning an 80% probability of a 50-bps rate hike in May and about 200 basis points in cumulative hikes by the end of 2022 after the Fed raised rates by a quarter point lin mid-March. Fed Chair Jerome Powell said the central bank must move quickly to counter soaring inflation and that it could use bigger-than-usual rate hikes if needed, causing a sharp sell-off in government bonds. Yields on benchmark 2- and 10-year U.S. Treasury notes jumped to almost three-year highs as the market anticipates inflation will spiral higher, forcing the Fed to aggressively hike interest rates. This is a positive signal for the dollar.
Investment idea: buy 123.50 and take profit 124.10.