USD/JPY, FTSE Forecast: Two trades to watch

USD/JPY rises to a 34-year high & is on intervention watch

Dovish BoJ's comments raise doubts of further rate hikes
USD rises towards monthly high
USD/JPY rises to a 34-year high of 151.97

USD/JPY has risen to its highest level since 1990 amid USD strength and low trading volumes in the lead-up to the Good Friday holiday.

The yen’s depreciation to 151.97 came following comments from BoJ board member Naoki Tamura, who suggested that the central bank was in no rush to hike rates further and would remain largely dovish after last week’s rate hike, the first in 17 years. Finance Minister Shunichi Suzuki strongly warned that Japanese authorities could intervene to support the yen, although this has had little impact as the yen remains on the back foot.

The USD is rising against its major peers towards a monthly high as investors wait for fresh clues on the Federal Reserve's monetary policy outlook. The USD is finding support after dovish signals from other major central banks and ahead of Friday’s inflation data.

Yesterday's data showed a larger-than-expected rise in durable goods orders, pointing to signs of a recovery in US manufacturing, while consumer confidence held steady.

USD/JPY forecast – technical analysis

USD/JPY has risen above the 2023 high of 151.90 to a peak of 151.97, approaching the 152.00 line in the sand. A rise above here could pave the way for a move towards 153.80, the rising trendline resistance, although the risk of intervention is high.

Support can be seen at 150.90, the January high. A break below here brings 150.00, the psychological level, into focus.

FTSE falls despite Chinese industrial profits rising

China's industrial profits rise by 10.2%

Hawkish BoE comments limit gains

FTSE hovers below 7969

The FTSE is falling after rising to a 13-month high in the previous session. Falling oil prices and data from China are pressuring the index.

Chinese industrial profits rose by 10.2%, hitting a 25-month high amid signs of the slowdown bottoming out. The return to growth of Chinese industrial profits is an encouraging sign, although it's worth highlighting that the figures are being boosted by a low base of comparison from a year earlier. As a result, the market appears less than impressed by the double-digit growth, with miners falling lower.

Metal prices across the board are falling, following the data, amid a stronger USD. The USD is rising back up towards a monthly high, hurting dollar-denominated commodities.

Energy stocks are also dragging on the index. Oil majors are tracking oil prices lower after US inventories unexpectedly increased in the previous week, raising concerns over the demand outlook and pulling oil prices 1% lower.

There is no major UK economic data due to be released today, and the economic calendar is broadly quiet in the US as well. Attention will be on the US core PC data at the end of the week, which could provide further clues about the Federal Reserve's path for monetary policy.

FTSE forecast – technical analysis

The FTSE has held its break out from 7785 and is consolidating around last week’s 10-month high. Last week's high of 7969 remains the level buyers need to beat to bring 8000 and 8045, the all-time high.

Minor support is at 7890, the weekly low. Below here, there is little in the way of support until 7800 and 7786, the January high.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.