The Yen is taking advantage of the USD weakness. Overview for 31.10.2017

The USD/JPY pair is moving downwards on Tuesday; investors are waiting for new information from the USA.

On Tuesday morning, the Japanese Yen continues strengthening against the USD. The current quote for the instrument is 113.14.

Yesterday, the Yen went up in the price pretty significantly. For some reason, investors weren’t impressed by another speculations about the new head of the Federal Reserve. The shortlist of the White House includes three names, Powell, Warsh, and Yellen. The most probable choice is Powell, although earlier Warsh was more liked by Trump. Janet Yellen, the current Chairwoman, is also on the list, but she is very unlikely to keep the position for the second term. Her powers will expire in February 2018.

As soon as the speculations about the new head of the Fed, whose name will be announced this Thursday, entered the picture, investors decided to eliminate the risks and started selling the US Dollar. Once again, the Yen turned out to be a “safe haven” asset and got more expensive.

Another two-day meeting of the Bank of Japan was over today. Both the key interest rate (-0.1%) and the QE program remained unchanged. However, the inflation forecast for the next two years were revised downward, and that sparked the interest to the Yen. The CPI is expected to rise only by 0.8% in fiscal 2017-2018 (the July forecast was +1.1%), and by 1.4% in 2018-2019 (the previous estimation was 1.5%).

Today, the two-day meeting of the US Federal Reserve is going to start. Investors are expecting the regulator to talk about the rate increase in December 2017. If the Fed provides some specific comments, the USD will get the support it needs and the Yen will continue weakening.

RoboForex Analytical Department