As we expected, the pair USD/JPY continues to strengthen
Yesterday, the yen added 64 points, even on the back of weaker-than-expected trade balance data.
The balance, taking into account seasonal fluctuations amounted to 0.28 trillion yen against expectations of 0.45 trillion. Exports decreased from -4.0% to -6.8%, and imports from -14.2% to -14.9%.
However, the statements of Governor of the Bank of Japan on further easing, if necessary, support the yen. It also promotes the growth of Nikkei225.
In the US, Philadelphia Fed Manufacturing Index is forecasted down from 12.4 to 8.9. Initial jobless claims may show some deterioration - 265K vs. 253K the previous week.
Taking into account the positive expectations for the US economic indicators today and tomorrow, we expect the growth of the pair USD/JPY to 110.50 and above.
How to trade
We should buy call options if the pair USD/JPY rises above 109.90.
Target price: 109.90
Expiry time: 20:00 GMT