Trade idea for USD/JPY on March 30, 2023
At the Asian session on Thursday USD/JPY does not show a clear direction of movement and trades near the level of 132.30. The day before the pair tested the high of March 17 at 132.86, but failed to consolidate at these heights.
The Japanese currency is traditionally put under pressure by the end of the fiscal year in the Land of the Rising Sun. In addition, deputy governor of the Bank of Japan Shinichi Uchida said the day before that monetary policy adjustment of the regulator is possible only with price stability and improvement in economic conditions. At the same time, the official believes it is very important to maintain the inflation rate within 2%.
Kazuo Ueda will become the Governor of the Bank of Japan in April and is expected to correct monetary policy, though the official himself has repeatedly declared adherence to soft course, chosen by his predecessor Kuroda.
At the same time the situation can easily change, because important macroeconomic reports are coming out today in Japan. At 23:30 GMT the inflation report, industrial production and retail sales data will be released. Consumer prices are expected to slow from 3.4% to 2.7% and core inflation is expected to strengthen from 3.2% to 3.3%. We believe core inflation is the most accurate reflection of the situation and believe the report will force the Bank of Japan to move to tighten monetary policy, which will send USD/JPY lower.
We suggest including a sell order in the trader's trading diary
- Sell-stop 132/00
- take-profit 129.00
- stop-loss 133.00