USD/JPY continues to trade in the red as the rate cut by China has failed to bring cheer to the equity markets. China’s rate cut and liquidity infusion have failed to put a bid under the risky assets. The Anti-risk Yen remains better bid and is keeping USD/JPY on the defensive.
The USD/JPY pair has corrected lower, meeting support around the 38.2% retracement of its latest daily advance at 107.65. In the daily chart, a flat 20 DMA converges with the mentioned Fibonacci level, while the pair is now below the 100 and 200 SMA, both lacking directional strength. Technical indicators in the mentioned time-frame have lost their bullish strength, the Momentum holding within positive levels, and the RSI already at 47. Shorter-term, and according to the 4-hour chart, the risk is skewed to the downside, as the pair is now far below a bearish 20 SMA, while barely holding above a flat 100 SMA, and as technical indicators hold near oversold readings with no signs of bearish exhaustion.
Support levels: 107.65 107.30 106.90
Resistance levels: 108.25 108.70 109.10
Fundamental Overview
| GMT | Event | Vol. | Actual | Consensus | Previous |
|---|---|---|---|---|---|
| MONDAY, MAR 30 | |||||
| 06:00 | GBP Nationwide Housing Prices n.s.a (YoY) | 2.0% | 2.3% | ||
| 06:00 | GBP Nationwide Housing Prices s.a (MoM) | 0.1% | 0.3% | ||
| 07:00 | EUR HICP (YoY) | 0.9% | 0.9% | ||
| 07:00 | EUR HICP (MoM) | 0.1% | -0.1% | ||
| 07:00 | EUR Consumer Price Index (YoY) | 0.5% | 0.7% | ||
| 07:00 | EUR Consumer Price Index (MoM) | 0.1% | -0.1% | ||
| 07:00 | CHF KOF Leading Indicator | 81.1 | 100.9 |
The market’s sentiment took a turn to the worse on Friday, after the number of coronavirus cases in the US largely overtook those on China. The dollar fell alongside Wall Street, both adding to the bearish case of the pair. US Treasury yields, in the meantime, edged sharply lower, with the yield on the benchmark 10-year Treasury note settling at 0.67%.
At the end of the week, Japan published Tokyo March inflation, which resulted slightly below expected, at 0.4% YoY, although the core reading, excluding fresh food and energy prices, remained stable at 0.7% YoY. The country’s macroeconomic calendar will remain empty this Monday.
Big Picture
THEMES AFFECTING THE USD/JPY
USD BULLISH
- USD demand will remain strong
- Fed’s swap lines doesn’t ease demand for dollars
- The Fed is printing dollars and that makes the currency more attractive
- USD demand when a financial crisis hits
- USD is showing itself to be the real safe-haven currency
- Coronavirus and global recession to lead dollar demand
- Fed to be the first to raise interest rates
- Fed adding liquidity to the short-term repo market
- Markets have not priced-in future hawkish developments
- An hawkish hike with Fed officials are divided
- Liquidity shortfall pushed the repo rate up
- Other Central Banks easing will offset the Fed easing cycle
- The US dollar still being the carry king
JPY BULLISHUSD BEARISH
- Improved US dollar funding should take sting out of USD rally
- A sharp decline in oil prices is thought to weigh on the dollar
- Trump pushing the Fed onto rate cuts
- Tame inflation environment guaranteed to keep US rates in check
- U.S. data casts doubt on the Federal Reserve’s hawkishness
- Fed taking these steps to grow the balance sheet
- Money flows to EU on big fiscal stimulus from Germany
- Fed’s intervention in REPO market increases Balance Sheet
- Short-term dollar-funding strains
- US manufacturing weakness spilling over into the services sector
- Powell dovish despite better-than-expected jobs report
- Sentiment inside the Fed changed to dovish
- Traders pricing in a +-80% of two interest rate cuts this year
JPY BEARISH
SPECIAL WEEKLY FORECAST
USD/JPY Forecast: Risk, if it can’t get worse, can it get better?
The dollar rally faded this week as the panicked funding rush abated, the return on the 3-month US Treasury dipped below zero for the first time in history and the Federal Reserve’s purchase program lowered rates across the yield curve.Read full analysis
Avg Forecast108.83050556065707580859095100
- 53% Bullish
- 20% Bearish
- 27% Sideways
Bias BullishUpdated Mar 27, 15:00 GMT
LATEST USDJPY ANALYSIS
- Dollar falls broadly on global stimulus hopesBy AceTrader Team | 01:59 GMT
- USDJPY: Lots of action….but no real directional insight [Video]By LMAX Group Research Desk | Mar 29, 22:59 GMT
- USD/JPY Forecast: Fear helped the yenBy Valeria Bednarik | Mar 29, 14:37 GMT
- USD/JPY Forecast: Risk, if it’s not getting worse, can it get better?By Joseph Trevisani | Mar 27, 19:00 GMT
- AUD/USD Forecast: After rising over 600 pips, the worsening corona-crisis points to fresh fallsBy Yohay Elam | Mar 27, 15:31 GMT
- USD/JPY trades below the 110.00 barrierBy JFD Team | Mar 27, 12:32 GMT
- USD/JPY: The rally has now topped out [Video]By Richard Perry | Mar 27, 12:31 GMT
- USD/JPY analysis: Declined below 109.00By Dukascopy Bank Team | Mar 27, 12:25 GMT
- USD/JPY: First support at 107.80By Jason Sen | Mar 27, 12:18 GMT
EDITORS’ PICKS
EUR/USD: Back below 1.11 as President Trump extends shutdown through April
EUR/USD has fallen back below 1.11 amid risk aversion in stocks. US President Trump’s decision to extend lockdown to counter the coronavirus outbreak is likely to cause a deeper economic slowdown. Goldman Sachs believes the economic fallout has only just begun. EUR/USD News
GBP/USD: Off two-week high, below 1.2400, amid coronavirus crisis
With the dire warnings on the UK’s economic growth crossing wires amid expectations of a longer lockdown, GBP/USD drops below 1.2400 ahead of the London open on Monday. The surge in the virus figures and inclusion of the PM Boris Johnson recently weighed on the pair.GBP/USD News
USD/CNH: Extends recovery gains beyond 7.1050 after PBOC rate cut
USD/CNH takes further measures after China’s central bank took steps to combat the coronavirus (COVID-19). PBOC cuts seven-day reverse repo rate, Moody’s cited weakness of China’s shadow banking industry.Read more
Gold declines in Asia as dollar catches bid
Gold is entrenched in the negative territory in Asia as the US dollar, the shiny metal’s biggest nemesis, is benefitting from the renewed risk aversion in the equity markets. China’s reverse repo rate cut fails to restore risk sentiment and put a bid under the shiny metal. Gold News
USD/JPY keeps losses on 107.00 after China rate cut
USD/JPY continues to trade in the red as the rate cut by China has failed to bring cheer to the equity markets. China’s rate cut and liquidity infusion have failed to put a bid under the risky assets. The Anti-risk Yen remains better bid and is keeping USD/JPY on the defensive.USD/JPY News
MAJORS
- GBP/USD: Off two-week high, below 1.2400, amid coronavirus crisisBy Anil Panchal | 22 minutes ago
- EUR/USD: Back below 1.11 as President Trump extends shutdown through AprilBy Omkar Godbole | 25 minutes ago
- USD/JPY keeps losses after China rate cutBy Omkar Godbole | 02:46 GMT
CRYPTOCURRENCIES
- Ripple Price Analysis: XRP/USD recovers from the weekend dip to $0.16, bulls eye $0.18By John Isige | 03:17 GMT
- Bitcoin Price Analysis: BTC/USD refreshes levels under $6,000 as $5,000 beckonsBy John Isige | 02:47 GMT
- Ripple’s Price Analysis: XRP/USD settles above $0.1700, bullish sort-term trend confirmedBy Tanya Abrosimova | Mar 29, 14:42 GMT
SIGNATURES
- EUR/USD: Daily Recommendations on MajorBy AceTrader Team | 43 minutes ago
- Forex Weekly Outlook – Will U.S. Dollar Rebound After Rough Week?By Kenny Fisher | 51 minutes ago
- Is a US recession inevitable? What does the history of consumer sentiment tell us?By Joseph Trevisani | 03:23 GMT
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 Federal Reserve Bank (Fed)
On the other hand we found The Federal Reserve System (Fed) wich is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System’s structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.
FED Official Website, on Twitter and Facebook
The Bank of Japan (BOJ)
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.
BOJ Official Website and on Twitter
FED INTEREST RATE DECISION UNITED STATES USD
NEXT RELEASE APR 29, 18:00 UTC+00:00
- 30 :days13 :hours26minute
- n/aConsensus
- 0.25%Previous
BOJ INTEREST RATE DECISION JAPAN JPY
NEXT RELEASE APR 28, 03:00 UTC+00:00
- 28 :days22 :hours26minute
- n/aConsensus
- -0.1%Previous
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed’s Profile and Wikipedia
Haruhiko Kuroda
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.
Draghi on BOJ’S Profile and Wikipedia
BOJ NEWS & ANALYSIS
- USD/JPY better offered in COVID-19 risk off marketsBy Ross J Burland | 00:24 GMT
- BoJ: Reiterating its stance, in wake of coronavirus outbreakBy Ross J Burland | Mar 29, 23:55 GMT
- Tokyo area March overall CPI +0.4 pct YoYBy Ross J Burland | Mar 26, 23:38 GMT
- BOJ’s Adachi: Coronavirus outbreak has dealt a severe blow to Japan, USD/JPY stays below 110By Dhwani Mehta | Mar 26, 09:15 GMT
FED NEWS & ANALYSIS
- Is a US recession inevitable? What does the history of consumer sentiment tell us?By Joseph Trevisani | 03:23 GMT
- Fed to expand its balance sheet by $4-$5 trillion in this easing cycleBy Omkar Godbole | 00:28 GMT
- USD/JPY better offered in COVID-19 risk off marketsBy Ross J Burland | 00:24 GMT
- USD/CAD Forecast: A round trip and a two week low but still a three year highBy Joseph Trevisani | Mar 29, 21:52 GMT
ABOUT USD/JPY
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 carrying trades. This is the reason why is one of the most traded 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 the 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 referred 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 due 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.
RELATED PAIRS
GBP/USD
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’, referring 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 the 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.
EUR/USD
The EUR/USD (or Euro Dollar) 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: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it 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 the EUR/USD 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, let alone a consequent breakaway gap in the opposite direction.
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.
The USD/JPY pair has corrected lower, meeting support around the 38.2% retracement of its latest daily advance at 107.65. In the daily chart, a flat 20 DMA converges with the mentioned Fibonacci level, while the pair is now below the 100 and 200 SMA, both lacking directional strength. Technical indicators in the mentioned time-frame have lost their bullish strength, the Momentum holding within positive levels, and the RSI already at 47. Shorter-term, and according to the 4-hour chart, the risk is skewed to the downside, as the pair is now far below a bearish 20 SMA, while barely holding above a flat 100 SMA, and as technical indicators hold near oversold readings with no signs of bearish exhaustion.
Support levels: 107.65 107.30 106.90
Resistance levels: 108.25 108.70 109.10
Fundamental Overview
| GMT | Event | Vol. | Actual | Consensus | Previous |
|---|---|---|---|---|---|
| MONDAY, MAR 30 | |||||
| 06:00 | GBP Nationwide Housing Prices n.s.a (YoY) | 2.0% | 2.3% | ||
| 06:00 | GBP Nationwide Housing Prices s.a (MoM) | 0.1% | 0.3% | ||
| 07:00 | EUR HICP (YoY) | 0.9% | 0.9% | ||
| 07:00 | EUR HICP (MoM) | 0.1% | -0.1% | ||
| 07:00 | EUR Consumer Price Index (YoY) | 0.5% | 0.7% | ||
| 07:00 | EUR Consumer Price Index (MoM) | 0.1% | -0.1% | ||
| 07:00 | CHF KOF Leading Indicator | 81.1 | 100.9 |
The market’s sentiment took a turn to the worse on Friday, after the number of coronavirus cases in the US largely overtook those on China. The dollar fell alongside Wall Street, both adding to the bearish case of the pair. US Treasury yields, in the meantime, edged sharply lower, with the yield on the benchmark 10-year Treasury note settling at 0.67%.
At the end of the week, Japan published Tokyo March inflation, which resulted slightly below expected, at 0.4% YoY, although the core reading, excluding fresh food and energy prices, remained stable at 0.7% YoY. The country’s macroeconomic calendar will remain empty this Monday.
Big Picture
THEMES AFFECTING THE USD/JPY
USD BULLISH
- USD demand will remain strong
- Fed’s swap lines doesn’t ease demand for dollars
- The Fed is printing dollars and that makes the currency more attractive
- USD demand when a financial crisis hits
- USD is showing itself to be the real safe-haven currency
- Coronavirus and global recession to lead dollar demand
- Fed to be the first to raise interest rates
- Fed adding liquidity to the short-term repo market
- Markets have not priced-in future hawkish developments
- An hawkish hike with Fed officials are divided
- Liquidity shortfall pushed the repo rate up
- Other Central Banks easing will offset the Fed easing cycle
- The US dollar still being the carry king
JPY BULLISHUSD BEARISH
- Improved US dollar funding should take sting out of USD rally
- A sharp decline in oil prices is thought to weigh on the dollar
- Trump pushing the Fed onto rate cuts
- Tame inflation environment guaranteed to keep US rates in check
- U.S. data casts doubt on the Federal Reserve’s hawkishness
- Fed taking these steps to grow the balance sheet
- Money flows to EU on big fiscal stimulus from Germany
- Fed’s intervention in REPO market increases Balance Sheet
- Short-term dollar-funding strains
- US manufacturing weakness spilling over into the services sector
- Powell dovish despite better-than-expected jobs report
- Sentiment inside the Fed changed to dovish
- Traders pricing in a +-80% of two interest rate cuts this year
JPY BEARISH
SPECIAL WEEKLY FORECAST
USD/JPY Forecast: Risk, if it can’t get worse, can it get better?
The dollar rally faded this week as the panicked funding rush abated, the return on the 3-month US Treasury dipped below zero for the first time in history and the Federal Reserve’s purchase program lowered rates across the yield curve.Read full analysis
Avg Forecast108.83050556065707580859095100
- 53% Bullish
- 20% Bearish
- 27% Sideways
Bias BullishUpdated Mar 27, 15:00 GMT
LATEST USDJPY ANALYSIS
- Dollar falls broadly on global stimulus hopesBy AceTrader Team | 01:59 GMT
- USDJPY: Lots of action….but no real directional insight [Video]By LMAX Group Research Desk | Mar 29, 22:59 GMT
- USD/JPY Forecast: Fear helped the yenBy Valeria Bednarik | Mar 29, 14:37 GMT
- USD/JPY Forecast: Risk, if it’s not getting worse, can it get better?By Joseph Trevisani | Mar 27, 19:00 GMT
- AUD/USD Forecast: After rising over 600 pips, the worsening corona-crisis points to fresh fallsBy Yohay Elam | Mar 27, 15:31 GMT
- USD/JPY trades below the 110.00 barrierBy JFD Team | Mar 27, 12:32 GMT
- USD/JPY: The rally has now topped out [Video]By Richard Perry | Mar 27, 12:31 GMT
- USD/JPY analysis: Declined below 109.00By Dukascopy Bank Team | Mar 27, 12:25 GMT
- USD/JPY: First support at 107.80By Jason Sen | Mar 27, 12:18 GMT
EDITORS’ PICKS
EUR/USD: Back below 1.11 as President Trump extends shutdown through April
EUR/USD has fallen back below 1.11 amid risk aversion in stocks. US President Trump’s decision to extend lockdown to counter the coronavirus outbreak is likely to cause a deeper economic slowdown. Goldman Sachs believes the economic fallout has only just begun. EUR/USD News
GBP/USD: Off two-week high, below 1.2400, amid coronavirus crisis
With the dire warnings on the UK’s economic growth crossing wires amid expectations of a longer lockdown, GBP/USD drops below 1.2400 ahead of the London open on Monday. The surge in the virus figures and inclusion of the PM Boris Johnson recently weighed on the pair.GBP/USD News
USD/CNH: Extends recovery gains beyond 7.1050 after PBOC rate cut
USD/CNH takes further measures after China’s central bank took steps to combat the coronavirus (COVID-19). PBOC cuts seven-day reverse repo rate, Moody’s cited weakness of China’s shadow banking industry.Read more
Gold declines in Asia as dollar catches bid
Gold is entrenched in the negative territory in Asia as the US dollar, the shiny metal’s biggest nemesis, is benefitting from the renewed risk aversion in the equity markets. China’s reverse repo rate cut fails to restore risk sentiment and put a bid under the shiny metal. Gold News
USD/JPY keeps losses on 107.00 after China rate cut
USD/JPY continues to trade in the red as the rate cut by China has failed to bring cheer to the equity markets. China’s rate cut and liquidity infusion have failed to put a bid under the risky assets. The Anti-risk Yen remains better bid and is keeping USD/JPY on the defensive.USD/JPY News
MAJORS
- GBP/USD: Off two-week high, below 1.2400, amid coronavirus crisisBy Anil Panchal | 22 minutes ago
- EUR/USD: Back below 1.11 as President Trump extends shutdown through AprilBy Omkar Godbole | 25 minutes ago
- USD/JPY keeps losses after China rate cutBy Omkar Godbole | 02:46 GMT
CRYPTOCURRENCIES
- Ripple Price Analysis: XRP/USD recovers from the weekend dip to $0.16, bulls eye $0.18By John Isige | 03:17 GMT
- Bitcoin Price Analysis: BTC/USD refreshes levels under $6,000 as $5,000 beckonsBy John Isige | 02:47 GMT
- Ripple’s Price Analysis: XRP/USD settles above $0.1700, bullish sort-term trend confirmedBy Tanya Abrosimova | Mar 29, 14:42 GMT
SIGNATURES
- EUR/USD: Daily Recommendations on MajorBy AceTrader Team | 43 minutes ago
- Forex Weekly Outlook – Will U.S. Dollar Rebound After Rough Week?By Kenny Fisher | 51 minutes ago
- Is a US recession inevitable? What does the history of consumer sentiment tell us?By Joseph Trevisani | 03:23 GMT
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 Federal Reserve Bank (Fed)
On the other hand we found The Federal Reserve System (Fed) wich is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System’s structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.
FED Official Website, on Twitter and Facebook
The Bank of Japan (BOJ)
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.
BOJ Official Website and on Twitter
FED INTEREST RATE DECISION UNITED STATES USD
NEXT RELEASE APR 29, 18:00 UTC+00:00
- 30 :days13 :hours26minute
- n/aConsensus
- 0.25%Previous
BOJ INTEREST RATE DECISION JAPAN JPY
NEXT RELEASE APR 28, 03:00 UTC+00:00
- 28 :days22 :hours26minute
- n/aConsensus
- -0.1%Previous
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed’s Profile and Wikipedia
Haruhiko Kuroda
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.
Draghi on BOJ’S Profile and Wikipedia
BOJ NEWS & ANALYSIS
- USD/JPY better offered in COVID-19 risk off marketsBy Ross J Burland | 00:24 GMT
- BoJ: Reiterating its stance, in wake of coronavirus outbreakBy Ross J Burland | Mar 29, 23:55 GMT
- Tokyo area March overall CPI +0.4 pct YoYBy Ross J Burland | Mar 26, 23:38 GMT
- BOJ’s Adachi: Coronavirus outbreak has dealt a severe blow to Japan, USD/JPY stays below 110By Dhwani Mehta | Mar 26, 09:15 GMT
FED NEWS & ANALYSIS
- Is a US recession inevitable? What does the history of consumer sentiment tell us?By Joseph Trevisani | 03:23 GMT
- Fed to expand its balance sheet by $4-$5 trillion in this easing cycleBy Omkar Godbole | 00:28 GMT
- USD/JPY better offered in COVID-19 risk off marketsBy Ross J Burland | 00:24 GMT
- USD/CAD Forecast: A round trip and a two week low but still a three year highBy Joseph Trevisani | Mar 29, 21:52 GMT
ABOUT USD/JPY
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 carrying trades. This is the reason why is one of the most traded 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 the 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 referred 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 due 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.
RELATED PAIRS
GBP/USD
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’, referring 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 the 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.
EUR/USD
The EUR/USD (or Euro Dollar) 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: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it 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 the EUR/USD 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, let alone a consequent breakaway gap in the opposite direction.
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.
The USD/JPY pair has corrected lower, meeting support around the 38.2% retracement of its latest daily advance at 107.65. In the daily chart, a flat 20 DMA converges with the mentioned Fibonacci level, while the pair is now below the 100 and 200 SMA, both lacking directional strength. Technical indicators in the mentioned time-frame have lost their bullish strength, the Momentum holding within positive levels, and the RSI already at 47. Shorter-term, and according to the 4-hour chart, the risk is skewed to the downside, as the pair is now far below a bearish 20 SMA, while barely holding above a flat 100 SMA, and as technical indicators hold near oversold readings with no signs of bearish exhaustion.
Support levels: 107.65 107.30 106.90
Resistance levels: 108.25 108.70 109.10
The market’s sentiment took a turn to the worse on Friday, after the number of coronavirus cases in the US largely overtook those on China. The dollar fell alongside Wall Street, both adding to the bearish case of the pair. US Treasury yields, in the meantime, edged sharply lower, with the yield on the benchmark 10-year Treasury note settling at 0.67%.
At the end of the week, Japan published Tokyo March inflation, which resulted slightly below expected, at 0.4% YoY, although the core reading, excluding fresh food and energy prices, remained stable at 0.7% YoY. The country’s macroeconomic calendar will remain empty this Monday.