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US supports Japan's efforts for growth, beat deflation

In what should be interpreted as a decently bullish signal for the USD/JPY, Lael Brainard, who is the United States Under Secretary of the Treasury for International Affairs, crossed the wires less than an hour ago to state that the US supports Japan’s efforts to boost economic growth and beat a 2-decade long deflation cycle.

Mr. Brainard added: "G7 has to focus on delivering pledge to market-based rates. G7 ‘very committed’ to floating FX. Important for fiscal and monetary policy to focus on domestic objectives. US in frequent communication with Japan, other G7 members..."

The comments come on the back of growing criticism over Japan's radical shift in monetary policy, which at this stage has been more verbal intervention than actual facts, yet as it is well known, market have been extremely busy discounting expectations.

According to Adam Button, editor at ForexLive: "That’s a bullish USD/JPY headline. It sounds like the US has no problem with higher USD/JPY and that would be a significant hurdle out of the way." Adam thinks "it’s a powerful signal that the US is ok with everything Japan is doing" he notes, adding that "if that’s the US position, don’t expect the G20 to be any different."

Forex: USD/JPY jumps towards 94.00

The US Dollar has finally jumped against the Japanese Yen after a previous period of consolidation. The USD/JPY advanced 60 pips in the last few minutes from 93.35 to reach intra-day highs around 93.90. Currently the pair is pricing at 93.85, 1.20% positive on the day.
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