No important events are expected today.

The uptrend in the US stock market is gaining momentum, which will have a favourable effect on the value of this currency pair, as USDJPY historically correlates with the SP500 index. The Fed reported that dollar liquidity in the US banking system rose by $31.8bn over the past week, with the US Treasury continuing to spend cache than fuels the banking system. Janet Yellen has $162.7 billion left in its accounts.

At first glance, not much, considering that during the last week the Treasury spent $37bn, however in April corporations will be paying taxes and the Treasury will be provided with cash for a few months. Overall, the Treasury could hold out until autumn and then either default or Congress will approve a new government debt ceiling. Rising dollar liquidity in the financial system is positive for the SP500, so we expect both the US equity market and the USDJPY currency pair to rise.

Recommendations: Buy 132.47/131.95 and TP 133.51.