US DOLLAR OUTLOOK: USD/JPY MAY PIVOT LOWER AS JAPANESE YEN GAINS GROUND

Spot USD/JPY costs have climbed roughly 4.5% from its year-to-date low printed on August 26. The 2019 backside close to 104.50 – which surpassed the January 03 JPY flash crash low – marked the beginning of a sluggish and regular climb within the US Greenback following Fed Chair Powell’s Jackson Hole Symposium speech the place the top central banker capitulated to the market’s dovish FOMC price minimize expectations by stating “we are going to act as acceptable to maintain the enlargement.” The comment got here subsequent to the Fed’s first 25-basis level rate of interest minimize in roughly a decade within the midst of the Great Financial Crisis.

The Federal Reserve proceeded to ship one other two 0.25% price cuts to spherical out the 1990s-style ‘mid-cycle adjustment’ over its subsequent two coverage conferences. Looser monetary circumstances from the Fed helped present ‘insurance coverage’ in opposition to an increase in draw back dangers to its outlook which stemmed…