USD/JPY Bull Trend Vulnerable to Swings in Risk Sentiment

Japanese Yen Talking Points

USD/JPY bounces back from a fresh weekly-low (111.82), with benchmark equity indices reflecting a similar dynamic, but the exchange rate may continue to threaten the upward trend from earlier this year as it extends the series of lower highs from earlier this week.

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USD/JPY Bull Trend Vulnerable to Swing in Risk Sentiment

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It seems as though swing in risk appetite will continue to sway USD/JPY ahead of the next Federal Open Market Committee (FOMC) meeting in November as the central bank is widely expected to retain the current policy, and the recent pickup in risk appetite may prove to be short lived as dual threats of rising tariffs, rates add to the global wall of worry.

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Keep in mind, the FOMC’s hiking-cycle instills a long-term bullish outlook for USD/JPY as Chairman Jerome Powell Co. appear to be on track to deliver another 25bp rate-hike in December, and the central bank may continue to endorse a hawkish forward-guidance going into 2019 as a growing

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