Why The USD/JPY Is The Currency Pair To Watch

In general, the USD/JPY doesn’t get as much love in the press as it should. However, that seems to be changing, and for good reason. In fact, with recent comments from President Donald Trump sending the USD upward and positive economic expectations sending the JPY upward, the race is on. Today, we’ll talk about both of those stories and what traders should be watching for ahead.

Donald Trump Comments Send The USD UpwardAs mentioned above, the USD has been on a strong note as of late, and for good reason. At the end of the day, everyone expected for Donald Trump to make changes that would improve the United States economy, and while he has made some changes, investors have been in wait and see mode for some time. After all, his biggest attempted change, repealing and replacing Obamacare, didn’t go over very well. However, there’s another big promise that looks like it might actually come to fruition.

On Thursday, Donald Trump made comments with regard to taxes in the United States. In his comments, Trump said that he would be unveiling a new tax plan relatively soon. In fact, it is expected that the plan will come as soon as next week. However, what caused the USD to rise wasn’t the fact that a new tax plan is coming, it is the fact that President Trump said that the new plan would include a “massive tax cut” for businesses and inpiduals.

Of course, a large tax cut would mean that consumers will have more money to spend. Since economies ultimately run on spending, the idea is that this new tax plan will lead to economic growth in the country. Because currencies are as strong as the economies they represent, this ultimately sent the USD skyward.

Japanese Exports See Massive Growth In MarchOn the JPY side of the equation, we’re also seeing some positive news, leading to a strong race between the currencies. You see, last week, overwhelmingly positive economic news was released in Japan. Here’s what we learned…

  • Exports – In the month of march, exports rose 12% from the year earlier. This far outpaced expectations of 6.2% growth.
  • Imports – On the imports side of the equation we saw more positive news. In fact, imports saw the biggest growth that they have seen in more than 3 years at 15.8%.
  • Trade Surplus – Finally, in the month of March, Japan clocked a trade surplus in the amount of 614.7 billion yen. That number also outpaced expectations of 608 billion yen.

Ultimately, this data caused gains on the Japanese side of the equation. With strong economic data, it only makes sense that the JPY made a run for the top.

What Traders Should Be Watching For AheadMoving forward, the USD/JPY currency pair is likely to lead to several profitable opportunities for traders. However, if you want to take advantage of these opportunities, you’ll need to keep a close eye on the news. In particular, watch news associated with Donald Trump’s tax plan and how it will affect the United States. Also, keep a close eye on economic growth in Japan. With strong data on the Japanese side of the equation, this could turn into a positive trend for the JPY. Paying attention to both sides will give you a good idea of where the currency pair is headed next.

This entry was posted in PRO and tagged . Bookmark the permalink.
0 0 votes
Notify of
0 评论
Inline Feedbacks
View all comments