RidetheMacro| USDJPY Outlook 2020.09.19📌the USD/JPY currency pair reached one and a half month lows this week at the middle of the 104th figure. In this price area, the southern momentum has faded and now traders are at crossroads: on the one hand – the weakening greenback which again began to lose its positions and on the other hand – the lack of weighty arguments for continuing the downward movement. The results of the September meeting of the Bank of Japan and the data published today on the growth of Japanese inflation did not provide any clarity as the USD/JPY pair continues to trade against the background of a contradictory fundamental picture.📈
🏦 the BoJ said in its Sept. 17 monetary-policy statement. “The pace of improvement is expected to be only moderate while the impact of COVID-19 🦠 remains worldwide.”
The Japanese economy shrank 7.9% on quarter in Q2 2020, compared with the preliminary reading of a 7.8% decline and market consensus of an 8.1% drop, and after a 0.6% fall in Q1. This was the third straight quarter of contraction and the steepest on record, amid the severe impact of the COVID-19 crisis. Private consumption tumbled, falling for the third straight quarter (-7.9% vs -0.7% in Q1)
📍 Any material shift in this regard may be exacerbated by a contraction in global growth, with capital flight into the dollar
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