- USD/JPY continues rally
- Japan releases its GDP on Wednesday
- Fed members warn more rate hikes are on the table
USD/JPY is continuing to rise and is up for the fourth consecutive day. It has gained 230 points in that time. USD/JPY trades at 136.62, up 0.37%.
Japan releases its GDP for the second-quarter early on Wednesday. The consensus estimate for the second quarter is 0.2%, following a revised down 0.0% in Q1. The economy is still struggling and the combination of a weak domestic economy and a struggling world economy will likely mean a bumpy ride for the economy.
Fed continues to be hawkish regarding rates
Federal Reserve continues to send a hawkish signal to the markets. The markets are expecting a pause in rate hikes at the June meeting, although the odds of a pause are currently 75%, compared to 95% last week, according to the CME’s FedWatch. Inflation may have fallen but the battle is far from over with inflation well above the Fed’s target of 2%.
Richmond Fed President Tom Barkin said on Monday that he saw “no barrier” to higher rates if high inflation persisted. Barkin said the demand was slowing down, but not enough to get inflation to 2%. As for job market ,…