Correlation between USDJPY and stock markets | 21 Enero 2022

21 Enero 2022, USD/JPY

Correlation between USDJPY and stock markets

USDJPY trading plan:

U.S. banks' appetite for U.S Treasuries could slow down as they shift their focus to loan growth, at the same time that the Federal Reserve plans to shrink asset holdings and raise interest rates to fight inflation. Asset purchases by the Fed contributed to unprecedented liquidity and trading activity through the pandemic, but trading revenue at leading Wall Street banks fell in the fourth quarter as markets normalized and the U.S. central bank started scaling back its asset purchases, which resulted in lower trading volumes. Less demand for long-term U.S Treasuries could put further pressure on yields that have jumped this month as investors adjusted to expectations that the Fed will tighten monetary policy more aggressively to counter unabated inflation. This is a bad signal for the stock market and USDJPY, which has a correlation with the shares.

Investment idea: sell 114.24 and take profit 113.77.

David Johnson
Analyst of «FreshForex» company
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