The Japanese yen has improved in the Wednesday session. Currently, USD/JPY is trading at the 113 level. In economic news, the US releases Existing Home Sales and the Federal Reserve will publish the minutes of the January policy meeting. Later in the day, Japan releases SPPI, an important inflation indicator. The forecast for the January report is 0.4%, unchanged from the December reading. On Thursday, the US releases unemployment claims, with an estimate of 242 thousand.
The Federal Reserve will be on center stage on Wednesday. The central bank finally pressed the rate trigger in December, a full year after the previous rate hike. Last week, Fed Chair Janet Yellen strongly hinted that that another hike is on the way, leaving the markets to speculate on the timing of a hike – will it be in March or June? Even though the US economy is solid and we could see several rate hikes in 2017, market uneasiness over the Trump administration continues to grow, dampening investor appetite for risk. Trump continues to have difficulty filling in key cabinet positions and the media continues to probe connections between Trump officials and Russia. Trump is yet to outline a clear and coherent economic policy, although he has promised to unveil a tax package in the next few weeks. After Trump’s shock win in November, post-election euphoria boosted the markets. However, Trump’s first month in office has been marked by controversy and confusion, which has unsettled the markets.
