Chance for USD/GBP/AUD Upside as JPY Strength Limited
Japanese firms slashed spending on plant and equipment by the most in a decade in the second quarter, the government said on Tuesday. As a result, the strength of the Yen was limited while the USD/JPY staged a flat performance and consolidated around 105.70.To get more news about WikiFX, you can visit wikifx official website.
“Abenomics” is much more likely to see an end ahead of the news that Abe suddenly resigned his post, which put a premium on the Yen at once but later revealed to be unrealistic for markets. As the core of Abenomics, the Yens depreciation pushes domestic prices up and stimulate the production of companies.
However, Japan's second-quarter Capex falls most in decade, as reported on Tuesday. In addition, the strength of JPY will be limited considering other challenges ahead of Japan such as shrinking workforces and the indefinite postponement of Olympic Games.
In terms of USD/JPY, the rate is expected to see a further growth once finding the stability above the level of 104.00 in view of the strong support ever achieved around the level.
In terms of EUR/JPY, the rate is now stay in the ascending channel but may hit the resistance zone of 129.0-130.0 in future tradings if the support is continuously gained at the lower band of 125.0.
The exchange rate of AUD/JPY shows a more complex picture. Its short-term uptrend is expected to suffer a setback as it is currently approaching the resistance level of 78.60. While in the medium term, gains will be extended in future tradings if it stays constructive below the 76.60 level.
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