PBOC said it was lowering the interest rate | 18 January 2022

18 January 2022, USD/JPY

PBOC said it was lowering the interest rate

USDJPY trading plan:

The China central bank unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, leading some analysts to expect more policy easing this year to guard against developers' mounting risk of defaults. The People's Bank of China said it was lowering the interest rate on 700-billion-yuan worth of one-year medium-term lending facility loans to some financial institutions by 10 basis points to 2.85%. It also cut the 7-day reverse repo rate. Traders expect more policy easing as growth in the world's second-largest economy has shown signs of slowing from its rapid rebound after the COVID-19 slump. This is a good signal for the stock market and USDJPY, which has a correlation with the shares.

Investment idea: buy 114.44 and take profit 115.01.

David Johnson
Analyst of «FreshForex» company
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