FXstreet.com

Forex Technical Report

15

0

Pressure Mounting for Action by the Bank of Japan

Wed, Nov 19 2008, 12:57 GMT
by Forex Hound Analysis Team

ForexHound.com


Japanese Yen traders fear an intervention by the Bank of Japan if the Yen continues to appreciate. The problem is no one knows at which level the Bank of Japan will act. Traders cite the recent forecasts by Japanese automakers of profit declines in 2009 as the main reason for the need for an intervention at this time. Toyota issued its warning earlier in the week. Nissan said yesterday that its profits would go to “zero”. They blame lower sales in the U.S. and the stronger Yen for the anticipated losses. Automakers in China are also reportedly asking for government assistance.

Japanese exporters need the support of the Bank of Japan soon. Traders are speculating the Bank of Japan will need to send a serious message to the Forex markets at this time. This could come in the form of a massive selling of Yen coupled with an increase in money supply to assure the intervention takes hold. This action should have a strong dilutive effect on the Yen.

The weakening stock markets are driving traders to the Japanese Yen. An intervention should weaken the Yen which could then trigger a strong rally in U.S. equity markets. The question is not if this intervention will take place but when and at what level.


Archive

ForexHound.com  | #36548, PO Box 4668. New York - NY 10163-4668
http://www.forexhound.com/ | info@forexhound.com

Legal disclaimer and risk disclosure

Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.

Related reports

Weekly Market Commentary - The trend to lower interest rates continues by Mizuho Corporate Bank
Fri, Nov 20 2009, 15:48 GMT

Currency Currents by Black Swan Capital
Fri, Nov 20 2009, 13:23 GMT

Daily US Opening News by RANsquawk
Fri, Nov 20 2009, 12:01 GMT

Bank of Japan: More upbeat, more balanced by Danske Bank A/S
Fri, Nov 20 2009, 11:54 GMT

Market Session Snap-Shot by ACM - Advanced Currency Markets
Fri, Nov 20 2009, 11:06 GMT

japan, boj, jpy

View All

Related content

Asian forex market wrap; much ado about nothing
Forex Live | Fri, Nov 20 2009, 05:05 GMT

UPDATE: Asian Shares Mostly Lower; Tech, Resources Cos Down
Dow Jones | Fri, Nov 20 2009, 04:08 GMT

Asian Shares Lower; Technology, Resource Stocks Lead Losses
Dow Jones | Fri, Nov 20 2009, 01:10 GMT

Japan: Fujii wants BOJ to act appropriately
Forex Live | Fri, Nov 20 2009, 00:47 GMT

Japan’s Deputy prime minister worried about deflation
Forex Live | Fri, Nov 20 2009, 00:39 GMT

japan, boj, jpy

View All

Interested in forex trading? forex brokerage firms!


FOREX.com
Contact the broker/FDM
Open a demo account
FX Solutions LLC
Contact the broker/FDM
Open a demo account
Alpari (UK) Limited
Contact the broker/FDM
Open a demo account
FXDD
Contact the broker/FDM
Open a demo account
Interbank FX, LLC
Contact the broker/FDM
Open a demo account

GET CASH BACK FOR YOUR TRADES!   Learn more about the Pip Rebate Program

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

©2009 "FXstreet.com. The Forex Market" All Rights Reserved.