The themes in the play are supporting a bid on the yen while investors move to the sidelines ahead of today’s Federal Reserve meeting and while there are slimming expectations of a US rescue deal which weighs on risk sentiment and the greenback.
Looking ahead, analysts at Westpac explained that the FOMC is expected to hold fire after today’s meeting, but markets will be watching the post-meeting press conference closely for comment on risks and options for further easing.
Many forecasters expect a change in forwarding guidance on rates at the September meeting.
All eyes to the Fed:
Meanwhile, the US Federal Reserve announced an extension of most of its emergency lending measures, which were due to expire around 30 September, until year-end, except for their Commercial Paper Funding Facility, extended to March 2021, the analysts explained.
“The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover from the Covid-19 pandemic,” the Fed statement said. Since mid-March, the Fed has started nine emergency programs aimed at pumping liquidity into short-term credit markets and extending credit to businesses and local governments affected by the economic fallout from COVID.”
EUR/JPY LONG (Buy)
ENTER AT: 123.240