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On April 3, Kimberly Clausing, a former Biden administration official and nonresident senior fellow at the Peterson Institute for International Economics, called Trumps tariff announcement on Wednesday "very stubborn and much worse than I expected." "I expected things to be bad, but I didnt expect this level of self-harm. Its shocking that anyone thought this was a good idea. Id be shocked if we can get through this without a recession and Trump doesnt have to reverse his policies."On April 3, some economists worry that if Trump does not quickly cancel the latest round of tariffs, it may push the US economy into a recession. "If the US government implements these higher tariffs without major exemptions, it will be difficult for the economy to digest this. A recession seems more likely." said Mark Zandi, chief economist at Moodys Analytics. Zandi said, "In many ways, the tariffs announced by Trump are even worse than the worst case scenario he envisioned. If they stick to it, I will buckle up and prepare for the impact." Zandi added that on a static basis, tariffs account for nearly 2% of GDP (not considering the impact of tariffs on the economy and taxes), which makes this round of tariffs the largest tax increase since the tax increase used to finance the war during World War II.German Automobile Industry Association VDA: The EU must now speed up and make up its mind on the issue of free trade agreement.On April 3, the Reserve Bank of Australias latest report for the banking industry warned that continued uncertainty in US trade policy "could have a chilling effect on business investment and household spending decisions, and pose a significant headwind to the outlook for global economic activity and inflation." The Reserve Bank of Australia said there was also considerable uncertainty about the impact of possible changes in fiscal, regulatory and other government policies on global growth and inflation.The Hang Seng Index in Hong Kong opened on April 3 (Thursday) down 564.32 points, or 2.43%, to 22,638.21 points; the Hang Seng Technology Index opened on April 3 (Thursday) down 168.53 points, or 3.11%, to 5,257.91 points; the CSI 300 Index opened on April 3 (Thursday) down 219.05 points, or 2.57%, to 8,312.46 points; the H-share Index opened on April 3 (Thursday) down 61.24 points, or 1.59%, to 3,800.76 points.

As traders anticipate US CPI, USDJPY maintains a defensive position and trades above 146,000

Alina Haynes

Nov 10, 2022 18:32

截屏2022-11-10 下午4.21.43.png 

 

The USDJPY pair struggles to benefit on yesterday's modest rebound from the 145.15-145.10 support zone, or an almost two-week low, and confronts fresh supply on Thursday. During the early European session, the pair maintains a defensive posture and is currently trading marginally above the 146.00 round number at the daily low.

 

A small decrease in the U.S. dollar, along with repositioning activity ahead of significant U.S. macroeconomic data, drives some USDJPY sales. Traders are reluctant to place aggressive bets ahead of Thursday's release of the latest US consumer inflation data, so the downside remains contained. The crucial US CPI report will play a key role in determining the Fed's policy tightening path, which should influence the near-term USD price dynamics and provide a fresh impetus to the major's direction.

 

The markets continue to price in a rate hike of at least 50 basis points in December. In contrast, the Bank of Japan has not yet indicated an intention to raise interest rates. In addition, the BoJ remains committed to maintaining the 10-year bond yield at 0%. Thursday, Governor Haruhiko Kuroda of the Bank of Japan emphasized that the central bank must continue to support a feeble economic recovery with a liberal monetary policy. Kuroda remarked that economic uncertainty is fairly significant and that negative interest rates can be further decreased if necessary.

 

This is a big contrast to a more hawkish Federal Reserve and increases the probability of USDJPY purchases. In addition, the BoJ governor's rejection of aspirations for a direct intervention in the foreign exchange market to preserve the domestic currency gives credence to the bullish perspective. Therefore, any potential decrease may continue to attract some buyers and is likely to be restricted for the time being. A decisive breach below the psychological threshold of 145.00, however, would invalidate the positive outlook.

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