Important events today:

12:30 UTC – US: Producer Price Index for April.

The decline in quotations to the nearest support levels is advisable to use for opening Buy positions for two reasons. Firstly, the Japanese monetary authorities once again said that it is necessary to keep the current monetary policy, which is negative for the Yen. The Japanese central bank is afraid of raising interest rates because it might trigger a major financial crisis.

Secondly, fresh inflation statistics from China might make the local Central Bank to increase its stimulus program which would have a positive impact on stock markets and the USDJPY as the assets are correlated with each other. Inflation in the Celestial Empire fell to 0.1%, with the Central Bank’s target of 3%. Such low inflation is due to problems of weak consumer demand, which needs to be stimulated.

Recommendations: Buy 133.90/133.59 and TP 134.89.