Despite raising interest rates for the first time since 2007, the Bank of Japan (BoJ) maintained a dovish tone at the end of its March policy meeting and gave no indication of future steps or pace of policy normalisation. This is causing the JPY bulls to be defensive, although verbal interventions from the Japanese authorities are helping to limit further losses.

The US Dollar (USD) continues to be supported by a positive outlook for the US economy and doubts that the Federal Reserve (Fed) will cut interest rates three times this year, as previously forecasted, due to still-volatile inflation. This is considered a supportive factor for the USD/JPY pair, which in turn supports further upside prospects. However, traders may want to wait for the publication of the US Personal Consumption and Expenditure (PCE) price index on Friday to gain more insight into the Fed’s policy direction and make new trades.

Trading recommendation: Trade with buy orders when the price reaches 151.75. Sell at a price level of 151.20.

Origin: FreshForex

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