USDJPY Daily FX Alert
USDJPY Daily FX Alert
USD/JPY Intraday: bullish bias above 101.75.
Japan’s gross domestic product (GDP) is expected to take another hit on April 1, when a sales tax increase, from the current 5 to 8 percent is to come into force. Economists fear the increase will throttle domestic consumption, accounting for 60 percent of Japan’s GDP, thus killing off the recovery completely.
Japan’s parliament, on Thursday, approved a 2014 budget bill, envisaging record government spending to the tune of 95.9 trillion yen (680 billion euros, $936 billion).
Under the legislation, as overall state expenditures rise by 3.3 trillion yen compared with the current fiscal year, the conservative government of Prime Minister Shinzo Abe will boost social security spending by 1.4 trillion yen to cover rising welfare and pensions cost for Japan’s ageing population. vot: 101.75
Confidence at Japanese manufacturers held steady in March but is seen weakening over the next three months, a Reuters poll showed on Wednesday as firms prepare for a sales tax rise next month that some expect will hurt economic momentum.
The BOJ’s December-quarter tankan showed business sentiment hit a six-year high, but big manufacturers and non-manufacturers expected business conditions to weaken in March.
Our preference: Short positions above 101.75 with targets @ 102.85 & 103.15 in extension.
Alternative scenario: Below 101.75 look for further downside with 101.2 & 100.65 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited. The pair is drawing a Bullish Flag pattern calling for further upside.
Opinion published is an intraday view.
Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point | Black represents the price when the report was produced
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