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The greenback was trading lower against the Japanese yen on Monday, mostly as a result of an upbeat Japanese trade balance release in April. The trade surplus hit 823.5 billion yen in April, significantly better than the forecast of 540.0 billion yen. Meanwhile, Japanese economy grew at the fastest pace in a year in the first quarter, led by a leap year consumption boost. Nevertheless, analysts said the rebound was not strong enough to fan concerns over a contraction in this quarter. Meanwhile, in the middle of the observed period the pair's corrective move to the upside lost momentum thus pushing the pair below the 110 mark after Bank of Japan (BoJ) Governor Haruhiko Kuroda surprised markets with his hawkish comments. "If forex moves have big impact on achieving our price target, we will take additional easing steps," Kuroda said. Nevertheless, the dollar rose to two-month highs after Fed Chair Janet Yellen said that the US interest rates could rise in the coming months.
It seems that traders still are optimistic about the pair as well, as the proportion of bulls fell below 70%. Moreover, the pair is expected to reach 111.60 by this Friday. In line with ‘buy' signals from the market sentiment, the consensus forecast stands above last week's average price of 108.38. As usual, biggest part of economic news will come from the American side, namely the report on manufacturing activity from and the release of the ADP nonfarm payrolls report. The weekly report on initial jobless claims is going to be published in the same day.
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