Post-FOMC Levels Holding USD for Now; JPY-crosses Begin Breakdown
- USDJPY wipes out below 119.25, contrary to March seasonality.
- See the March forex seasonality report for trends in the QE-era.
The Japanese Yen is defying its seasonal tendencies right now, which could set up an interesting month of April. Typically, at least over the past five years, March has seen the Yen depreciate against its major counterparts, especially towards the end of the month due to the turnover of the Japanese fiscal year. Yet this year has been quite different, with USDJPY now sliding to fresh weekly lows and the Q1 uptrend showing signs of breaking.
Indeed, if the Yen is able to break its seasonal tendency, then it enters the most bullish portion of the year for the funding currency with wind at its back. The Japanese Yen has seen appreciation versus its major counterparts on average from April to August, and a jumpstart on that trend (be it due to lower global yields or geopolitical risk) could prime pairs like USDJPY, EURJPY, and GBPJPY for a rough few weeks ahead.
--- Written by Christopher Vecchio, Currency Strategist
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