BoJ preview: What to expect in USD/JPY?


FXStreet (Guatemala) - USD/JPY has been trading within familiar ranges for as long as the hourly chart goes back on the screen and without scrolling it back beyond September's business. A great deal of emphasis has been on the US and the Fed. Today, even for an hour or so, it is going to be about the BoJ.

BoJ anyone's guess, ( a slight bias to hold)

Today sees the outcome of the BoJ's two-day meeting on monetary policy. The bias for the BoJ to hold comes with a) timings b) exchange rate c) data.

BoJ on data

Of late, the data has not been a mile away from where the BoJ is satisfied with the recent Tankan survey a mixed one, with both good and poor news. The good news came in the non-manufacturing sector with business sentiment improving. Whereas the poor data stayed with manufacturing business sector worsening. Inflationary data and a drop in the core CPI can be blamed on the price of energy while core CPI that excludes energy was up y/y 1.1% and thus the BoJ's 2% target for inflation for 2016 is still a possibility.

USD/JPY exchange rate

The exchange rate remains in at a comfortable level for the BoJ while exports benefit from a weaker Yen as do earnings at many companies boosting stock prices, but the Yen is not too weak that the economy could be hurt by driving up the import costs that pushes up the prices of imported food and energy, hurting consumers and small businesses.

BoJ timings

Lastly, the BoJ have a further meeting at the end of the month along with its Outlook Report where there is more time for further instability in Global markets.

Key areas to monitor USD/JPY

Ahead of the outcome of the BoJ today, the areas to monitor for USD/JPY remain with the two-month ranges since the breakdown of 20th August business. The key resistance stays with the 200 DMA at 120.88 today, a break of which would then bring in tough resistance at 121.76/79, the late August high and the 61.8% retracement.

A bearish cross-over between the 20 SMA and 50 SMA on the hourly chart that appears to be emerging is a bearish signal worth monitoring, despite the divergence between the MACD and momentum indicators turning less negative. The key breakdown levels to the downside come as 118.33 March low en-route to the 2012-2015 116.62 uptrend. However, 120.00 is a relatively strong psychological supporting area for the time being.

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.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!
   

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD rises toward after US retail sales miss estimates

EUR/USD is holding onto its gains above 1.21 after the US reported no change in April's retail sales, below 1% expected. The Control Group plunged by 1.5%. The dollar is falling across the pond. US Consumer Sentiment missed with 82.8, yet inflation expectations surged to 4.6%.

EUR/USD News

GBP/USD trades below 1.41 after US consumption data

GBP/USD is trading above 1.4050, benefitting from the better market mood. Sterling is shrugging off worries about the spread of new virus variants, which may delay the reopening. US retail sales missed estimates, causing jitters. 

GBP/USD News

EUR/USD Weekly Forecast: Fed may fuel the next leg of rally, bulls eye 1.2240

EUR/USD has been extending its gains amid dovish Fed policy and the eurozone's vaccination drive.   Eurozone PMIs and Fed meeting minutes are set to move the currency pair. Mid-May's daily chart is pointing to further gains.The FX Poll is showing mild downside pressure. 

Read full analysis

Dogecoin bulls hold the key for 40% gains

Dogecoin price is at a pivotal point, resulting in a 40% upswing or 30% sell-off. A swift surge beyond $0.522 and a retest of this level confirms a bullish outlook. If DOGE slices through the $0.351, it will put an end to the optimistic narrative.

Read more

AMC Entertainment Holdings surges on triangle breakout, targets $14.54 and $20

AMC has done it again and in the process is stealing the GameStop crown. Supposedly a movie about the whole GameStop saga is in the works, but if AMC has its way it will be stealing the show. Coming to an AMC theatre near you: "AMC to the moon". AMC closed Thursday at $12.77 for a nice gain of 23.7%, thank you very much.

Read more

Forex MAJORS

Cryptocurrencies

Signatures