USD/JPY Forecast 16/12: Carry Trade Dynamics Persist
By Christopher Lewis
Christopher Lewis is a seasoned Forex trader with over two decades of experience in financial markets. He has been a trusted contributor to Daily Forex since its inception, sharing his insights on Forex trading across various online platforms, including FX Empire, Investing.com, and his own website, The Trader Guy.
In this analysis, Lewis delves into the USD/JPY currency pair, highlighting its recent behavior and future prospects. He notes that while the USD/JPY initially rallied, it has since shown signs of hesitation, with the 155 yen level providing some support.
Lewis emphasizes the ongoing carry trade dynamics and structural Japanese policy constraints, suggesting that pullbacks present buying opportunities. He explains that the interest rate differential continues to favor the US dollar, which should positively impact the USD/JPY pair in the long term.
Even in the event of a breakdown, the 50-day EMA offers support at 154 yen, and a pullback to 152 yen is expected. Lewis believes that these dips are ideal for long-term investors, and even short-term traders are capitalizing on this trend. He mentions the potential for the US economy to thrive in 2026, further supporting his optimistic outlook.
Lewis concludes by inviting readers to explore forex trading opportunities with USD/JPY and recommends checking out the list of forex brokers in Japan for further guidance. His expertise and long-term trading approach make him a valuable resource for those seeking insights into the Forex market.
