The rates are recovering after falling in November under the influence of panic around the pandemic. Will it be possible to reach the maximum level in 6.5 years this time, or will the rates be limited only to testing the highs reached in November?
At the moment, there is an increased demand for risk, as confidence appears that the Omicron strain will not harm the global economy. The USD is strengthening taking into account the growth of treasury bond yields and rate hikes in the New Year. Against this background, the yen is at a disadvantage because the Bank of Japan does not plan any rate hikes, and inflation targets will not be achieved in the foreseeable future. The rise in resource prices has led to an increase in producer costs, which puts pressure on the Japanese economy, which is completely dependent on imports of raw materials.
According to analysts' forecasts, the USD will remain strong at the beginning of 2022 and has every chance of further growth. Recent macroeconomic reports indicate an improvement in the economic situation in the United States, and a real interest rate increase affects the value of the USD. Therefore, it is expected that at the beginning of 2022, the rates will easily reach the level of 117 JPY, although price corrections are possible. Today we have already had an overbought signal. However, most technical instruments indicate the effectiveness of the deals to BUY. We also believe that such deals will be effective in the near future.
