The yen has a new wave of optimism

USD / JPY

Last Friday, the yen fell a little on rumors which will be confirmed in the future, as Donald Trump had a premature departure from the G-7 summit without signing a resolution. There are also strikes and rallies in Vietnam and Bucharest. On Saturday, the Chinese CPI showed in the May assessment that the indicator remained at 1.8% YoY. While the producer price index increased from 3.4% YoY to 4.1% YoY. This morning, the Japanese index of basic orders for machinery products in April showed a strong increase of 10.1% m/m against the forecast of 2.5% and -3.9% in March. The monetary aggregate in May kept its growth at the level of the previous month - 3.2% YoY. Despite the forecast of 3.2%, the indicator can carry positive expectations for inflation.

Tomorrow will be the first meeting of Donald Trump with Kim Jong-un in Singapore, which is anticipated to be the first relations between the two leaders on the issue of the DPRK nuclear program. These are all positive moments for the dollar and USD/JPY pair growth. On Monday, the Japanese stock index Nikkei 225 is growing at 0.60%.

Also, the BSI index of business sentiment in major industrial companies in Japan (BSI Manufacturing) for the 2nd quarter will be issued tomorrow, it is expected to grow from 2.9 to 3.2 points. Japan's producer price index for May is forecasted to grow tomorrow from 2.0% YoY to 2.1% YoY. Also, the tertiary index of business activity in the service sector for April is expected to grow by 0.6% against -0.3% in March.

We are looking forward to the continued growth of the yen in the range of 110.85-111.10 and further (after raising the Fed rate) to 112.05.

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* The presented market analysis is informative and does not constitute a guide to the transaction.

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