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.