A divergence in monetary policy | 21 Abril 2022

21 Abril 2022, USD/JPY

A divergence in monetary policy

USDJPY trading plan:

A divergence in monetary policy between the U.S. Federal Reserve, pushing for sizeable rate hikes, and Japan's central bank that has kept interest rates ultra-low to support the economy, has nudged the yen down to a two-decade low near 129 to the dollar. That has triggered verbal warnings from the finance minister and BOJ governor Haruhiko Kuroda over sharp currency moves they say could be more damaging to the economy than helpful for its exports. The BOJ also has no intention to use monetary policy tools to directly curb yen declines, a move that could be interpreted as currency manipulation and goes outside its remit, traders said.

Investment idea: buy 127.90 and take profit 128.75.

David Johnson
Analyst of «FreshForex» company
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