Next week is crunch time for the USDJPY
Next week is crunch time for the USDJPY. On Wednesday the US FOMC updates its assessment of monetary policy, and on Thrusday the Bank of Japan (BOJ) releases updated economic forecasts. Either event on its own could cause the USDJPY to break out of its sideways pattern. Max McKegg, managing director of Technical Research Limited in New Zealand, says that when the BOJ decided to continue with its QE program on October 2014, it was also expecting –by doing this– that consumer prices would gradually accelerate to reach around 2% in or around FY2015. But six months later Japan’s CPI has given up all of its QE induced gains and has slumped back down to zero. McKegg says the BOJ has used its rhetoric ever after to give the impression that everything remains on target, but next Thursday it will no longer be able to finesse the situation. The Outlook for Economic Activity and Prices will contain new forecasts for GDP growth and inflation. What are we likely to read next week when the outlook is released? Reed here: (VIEW LINK)
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