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USD/JPY Forecast: Fed Rate Path, Middle East News, Intervention Risks, and 155
On Tuesday, the USD/JPY could be in the hands of the Bank of Japan and the Japanese government. Expectations of a more hawkish Fed rate path leave interest rate differentials firmly favoring the US dollar. Carry trades could send the USD/JPY pairing higher. However, intervention threats may intensify after breaching the 154 level for the first time since January 1990. A sharp decline in the Yen would increase prices for imported goods. Upward price trends for imported goods could affect household spending and the Japanese economy. Significantly, Yen trends could offset the effects of recent wage hikes and Bank of ... (full story)