USD/JPY Current price: 106.94
- The Bank of Japan left its monetary policy unchanged, downgraded inflation and growth forecasts.
- Tokyo raised its alert to the highest levels this Wednesday, amid a spike in contagions.
- USD/JPY neutral-to-bearish on broad dollar’s weakness and heading towards 105.95.
The American dollar is in trouble against most major rivals, the Japanese yen included, as hopes for a coronavirus vaccine fuel optimism, sending global equities up ever since the day started in Asia. According to a press note from biotech Moderna, its vaccine has been found to induce immune responses in all of the volunteers who got it in a phase one study. On a down note, however, the number of new contagions continues to increase, and Tokyo raised its alert to the highest levels just this Wednesday.
The USD/JPY pair is down to the 106.90 region, not affected by the Bank of Japan monetary policy decision. As expected, the central bank kept rates unchanged at -0.1%, and its 10-year JGB target around 0%. Also, policymakers downgraded growth forecast, now seeing the economy shrinking between 4.5% and 5.7% in the current fiscal year. Core inflation is expected to stay between -0.5% and -0.7% in the same period. The US has a light macroeconomic calendar, with the focus on June Industrial Production, foreseen at 4.3% from 1.4% in the previous month.
USD/JPY short-term technical outlook
The USD/JPY pair is neutral-to-bearish in the short-term, still developing within familiar levels. To turn bearish, it would need to break below the 106.60 level, as it met buyers in the area several times throughout June and July. The 4-hour chart shows that the pair remains below all of its moving averages, which remain directionless, reflecting the lack of a clear trend. Technical indicators, in the meantime, have turned flat, although the RSI stands around 40, skewing the risk to the downside.
Support levels: 106.60 106.20 105.90
Resistance levels: 107.30 107.75 108.10
View Live Chart for the USD/JPY
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.