USD/JPY: Dollar steady amid the BOJ decision, ahead of US GDP
The USD/JPY is trading around ¥109.35, marginally higher on the day. The Bank of Japan left its policy unchanged and abandoned an explicit time frame for reaching the 2% inflation target. The Korean Summit improved the mood. Later, US GDP is the main event of the day.
1. Technical Overview
Omkar Godbole, Analyst at FXStreet notes: “A rally to 110.04 (61.8 percent Fibonacci retracement of Jan-Mar sell-off) cannot be ruled out, albeit after a minor pullback as suggested by the developments in the 4-hour chart. The bearish RSI divergence indicates scope for a minor pullback to 108.89 (100-day MA). A violation there would expose support at 108.28 (Jan. 26 low). However, the dips will likely be short-lived as suggested by the bullish setup in the daily chart. Only a daily close below 108.28 would abort the bullish view.“
USD/JPY PRICE SENTIMENT
USD/JPY BULLISH PERCENTAGE INDEX
The major pair is showing signs of bottoming out off the 2018 low down in the 104s, with the latest push back through 108.00 strengthening the recovery. This has opened the latest surge that is showing room for an extension up into the 110.50-111.50 area. Setbacks should now be supported ahead of 108.00 previous resistance.
USD/JPY Pivot points
USD/JPY trading positions
2. Fundamental Overview
The USD/JPY pair is seen making another attempt to regain the 109.50 barrier, having consolidated briefly around 109.20 following the Bank of Japan’s (BoJ) monetary policy decision.
The spot is catching a fresh bid-wave, as markets resort to fresh Yen selling across the board, in a delayed reaction to the BoJ’s removal of the phrase on the timeframe for achieving the price target from its quarterly outlook report. This implies that the Japanese central bank is not confident that it can achieve its 2 percent inflation goal by FY 2019 as previously mentioned.
Meanwhile, the US dollar extends its consolidative near multi-month tops against its main peers, in response to a wait-and-see stance ahead of the US GDP numbers. Thus, having little impact on the USD/JPY’s renewed upside while the Nikkei 225 index extended gains and finished +0.71% on the day.
All eyes now remain on the BoJ Governor Kuroda’s press conference for fresh momentum on the prices.
USDJPY FUNDAMENTALS TODAY
3. Latest News & Analysis
Influential Institutions & People for the USD/JPY
The US Dollar Japanese Yen can be seriously affected by news or the decisions taken by two main central banks:
The Bank of Japan is the central bank of Japan and it's a juridical person established based on the Bank of Japan Act, nor being a government agency either a private corporation. The most important missions of the BOJ are the following: to issue and manage banknotes, to implement monetary policy and to ensure stability of the financial system. Almost all of the decisions are taken by the Policy Board, formed by a bunch of members working to provide currency and monetary control and setting the next moves that the central bank will take.
On the other
Haruhiko Kuroda was nominated, by Prime Minister Shinzo Abe, as Governor of the Bank of Japan in March 2013. He had previously worked as President of the Asian Development Bank for 8 years. As the head of the BOJ, he has a major influence over the Japanese Yen. His words are usually followed by traders in order to find any clue of next possible trend in the currency.
Janet L. Yellen (born August 13, 1946) took office as Chair of the Board of Governors of the Federal Reserve System (Fed) on February 3, 2014, for a four-year term ending February 3, 2018. She had already previously served as a Vice Chair from 2010 to 2014. This American economist also serves as Chairman of the Federal Open Market Committee (FOMC), the System's principal monetary policymaking body. Her declarations are also an important source of volatility, especially for the US Dollar and the currencies traded against it.
BOJ NEWS & ANALYSIS
FED NEWS & ANALYSIS
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In this pair the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading this currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when reffered to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is dued to the fact that both currency pairs also use the US Dollar as the base currency. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.
USDJPY 2017 YEARLY FORECAST
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', reffering to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.
The EUR/USD (or Euro Dollar) currency pair is one of the 'Majors', or most important pairs in the world. This group also includes GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The Euro Dollar gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since this pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.