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USDJPY Outlook 13 April 2023The USDJPY trades along the 133 support level and could see further downside as the DXY continues to weaken. However with the continual divergence in monetary policy between the US Federal Reserve and the BoJ, a rebound to the upside is likely to always be on the cards. If the USDJPY breaks strongly below 133 (and more crucially below 132.70) the price could trade down to 132. Looking for a possible test and rebound from the 132 round number support level
Short
by JinDao_Tai
USDJPY Outlook 11 April 2023With the overnight strength of the DXY, the USDJPY climbed steadily to the upside, as the price approached the 134 round number resistance area. Weakness in the Japanese Yen was also compounded by the statement from the new BoJ Governor Ueda, indicating that large scale monetary easing policy will continue. This was in contrary to the market anticipation that Governor Ueda could trim back on easing. While the USDJPY retraces from the resistance level, look for the price to bounce from either the 23.60% fib level which is also the 133 round number level, or more likely at the 132.60 price level which is the 38.20% fib level and the upward trendline providing support. Further upside on the USDJPY could see the price climb steadily toward the 135 key resistance level.
Long
by JinDao_Tai
USD/JPY - Yen slides as Ueda says no plans for policy shiftBank of Japan Governor Ueda spoke at his first news conference as head of the central bank today. It wasn't quite a State of the Union address, but Ueda's message was clear - the current monetary policy was appropriate and he had no plans to make any major shifts. There has been strong speculation that Ueda will make some significant moves, perhaps not right away but in the next few months. After years of battling deflation, Japan is facing inflation which has risen above the BoJ's 2% target. The US/Japan rate differential has been widening as the Fed continues to raise rates while the BoJ has capped yields on 10-year government bonds and interest rates remain negative. The changing of the guard at the BoJ seemed to some as an opportunity for BOJ policy makers to take some steps toward normalization, such as tweaking or even removing yield curve control. Ueda poured cold water on this sentiment, stating that, “Right now, the yield curve control is considered most appropriate for the economy while tending to market functionality”. Ueda's message of "stay tuned for more of the same" has lowered expectations of a policy shift at the April 28th meeting and the yen has responded with sharp losses. Japan's consumer confidence gave policy makers something to cheer about, rising to 33.9 in March, vs. 33.1 prior and 30.9 anticipated. This was the highest level since May 2022, although consumer confidence remains deep in negative territory, below the 50-level which separates contraction from expansion. The week ended with a solid US employment report. The economy added 236,000 jobs last month, within expectations and softer than the upwardly revised 326,000 reading in February. The labour market is cooling but has been surprisingly resilient to relentless rate hikes and the odds of a 25-bp rate hike have increased to 68% according to the CME Group, compared to around 50% prior to the employment report release. There is resistance at 133.74 and 135.31 132.18 and 131.67 are providing support
by OANDA
The end of an era.This week, the Bank of Japan governor’s Kuroda’s decade long term comes to an end. As such we would like to take some time to review what this means for the Yen and in particular, the AUDJPY. Firstly, central bank timings. In case you missed it, last Tuesday the Reserve Bank of Australia (RBA) snapped its consecutive 10 rate hikes, being the second major central bank in developed markets to pause after the Bank of Canada. On the other hand, the Bank of Japan’s (BOJ) inaction thus far, is in stark contrast to the rest of the world. Kuroda officially ends his second 5-year term. With the new Governor Ueda at the helm, we think a move away from the current policy stance is very likely for BOJ as inflation remains uncharacteristically high for Japan and unemployment still relatively contained. A shift in the BOJ’s policies could mean the end of the largely debatable Yield Curve Control (YCC) policies, either in the form of abandonment or yet another change to the policy band or target yield as it repeatedly trades close to the upper limit of the currently allowed range. In fact, the OIS Implied rates for the 10-year Japanese gov yields show a huge disparity from the BOJ’s policy ceiling of 0.5%. While it has corrected from the high, it still trades north of the 0.5% cap by a clear margin, indicating market participants’ expectations that the yield cap is likely to be abandoned or shifted higher again. Coincidentally, the BOJ can take a page out of the RBA’s book, where RBA faced an almost identical situation, when in 2021 it was forced to abandon its three-year yield target. Once it lost control, yield quickly shot up there after. If or when the BOJ lose control of its YCC program, this warrants a peek into what might happen to Japanese Yields. Market expectations of forward rates are completely opposite for these two countries, with participants expecting the RBA to execute multiple rates cut through 2023, while Japan is expected to hike rates. So what does this mean for the currency pair? Well one way to look at this is the real yield differential between Japan (JP) and Australia (AU). When the AU – JP yield differential collapses, the AUDJPY tends to follow suit. If RBA is to hold rates, while the BOJ is to raise, we could see this yield differential collapse from here, paving the path for the next downward move in the currency pair. On the technical front, the AUDJPY is trading near its upper resistance of a four decade long descending triangle. On a daily timeframe, although the pair's first attempt to break below the 88 handle was short-lived, it now sits just above this support, which could lead to a second coming. Of course, such a trade might take a while to play out given the decade long chart pattern as well as fundamental factors such as central banks’ policy shifts. Looking ahead, the next potential catalyst could be the Bank of Japan’s first meeting under a new leadership on the 27/28th of April, while the RBA’s next meeting is scheduled for 2nd of May. To express this view, one option is to use the CME AUDJPY currency pair, which allows you to short the currency pair directly. Alternatively, if liquidity and contract size are of concern, the same view can be expressed by selling one Micro USDJPY Futures and buying two Micro AUDUSD Futures to construct a synthetic AUDJPY pair. Setting up the AUDJPY currency pair this way allows a more palatable trade as the notional amount is on roughly 20,000 AUD or 10,000 USD. This synthetic set-up allows us to access a more liquid market in both contracts compared with the full sized one. Using the descending triangle structure as a guide, we set our stops at 94, close to the previous resistance and our take profit at 70. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
Short
by inspirante
USD/JPY jumps after solid nonfarm payrolls releaseUSD/JPY has posted gains in the North American session after a solid showing from US nonfarm payrolls. Japan's real wages continued to fall, while household spending rebounded. In the North American session, USD/JPY is trading at 132.24, up 0.36% on the day. In the US, nonfarm payrolls was within expectations, easing concerns that the US labour market is in trouble. The economy added 236,000 in March, close to the market consensus of 240,000. This was a solid reading, although weaker than the February reading of 311,000. The US dollar posted gains against the majors after the release, after concerns that a soft reading might force the Fed to take a pause in its rate hikes. Japan's real wages fell in February for the 11th straight month, falling by 2.6%. Household purchasing power continues to drop, but this was an improvement over the -4.6% release in January, as government energy subsidies helped curb inflation. Household spending rose 1.6% in February, rebounding from -0.3% in January but well off the market consensus of 4.3%. The Bank of Japan doesn't meet until April 28th, but Governor Ueda will be under the magnifying glass, as he chairs his first meeting at the helm of the central bank. The economy is showing signs of improvement, with retail sales and industrial production accelerating in February. Inflation remains very low compared to other major economies but is still high for Japan. In February, CPI fell to 3.3%, down from 4.3% in January but above the BoJ target of 2%. There has been considerable speculation that Ueda could shift policy and tweak or even abandon the Bank's yield curve control policy. This move could have huge significance for the yen - when the BoJ widened the yield target band in December, the yen posted sharp gains. Ueda hasn't revealed any cards about what he might do at his first meeting. He has toed the line of the previous Governor, Haruhiko Kuroda, that the BoJ won't tighten until inflation is sustainable, and that would require higher wage growth. Wage growth has been falling, so any tightening moves such as raising interest rates do not appear imminent. USD/JPY is testing resistance at 132.27. Above, there is resistance at 133.45 130.94 and 129.09 are providing support
by OANDA
USD/JPY steadies after taking a tumble, Tokyo Core CPI loomsUSD/JPY is posted gains on Thursday after dropping sharply a day earlier. In the North American session, USD/JPY is trading at 132.45, down 0.31%. Later today, we'll get a look at Tokyo Core CPI, a key inflation measure. Wednesday was a day to forget for the Japanese yen, which lost 1.5% against the US dollar. USD/JPY touched a high of 132.89, its highest level in a week. The US dollar was broadly higher on Wednesday and a rise in US yields helped propel USD/JPY to even higher levels. US 10-yr and 2-yr Treasury yields both hit weekly highs, and the widening of the US/Japan rate differential is weighing on the yen. The banking crisis has eased somewhat, with no spreading of contagion since the stunning collapse of four US banks and Credit Suisse earlier this month. The markets are calmer, risk appetite has improved, and investors have moved away from the safe-haven yen in favour of riskier assets. Japanese inflation indicators have been pointing downwards and the markets will be keeping a keen eye on the March Tokyo Core CPI release later today. The February release showed a sharp drop in inflation, from 4.4% to 3.4%, but the decline was not all that surprising, as government energy subsidies kicked in last month and dampened inflation. Other core CPI indicators also eased in February. The March Tokyo Core CPI is expected to continue falling, with an estimate of 3.1%. Japanese inflation releases are closely watched, as higher inflation could force the Bank of Japan to pivot its ultra-loose policy. The central bank has insisted that the high inflation is transient and it expects inflation to fall to 2% later this year. The BoJ has said it would consider tightening policy only if there is evidence that inflation is sustainable, such as stronger wage growth. Japan's labour unions won substantial wage hikes earlier this month, and time will tell if wage growth kick-starts the weak economy and leads to higher inflation, which could force the BoJ, under new management, to reassess its easy monetary policy. USD/JPY is testing support at 132.60. Below, there is support at 131.12 133.75 and 134.48 are the next resistance lines
by OANDA
CHFJPY Breakout and potential retraceHey Traders, CHFJPY was trading in an uptrend and then massively managed to break it out due to JPY strength. one of the reason of the Yen strength is the major changes in monetary policy that are expected from BoJ since it didn't changed the monetary policy from a long time since now. and considering that also JPY is considered a safe haven in this type of environment we still expect further strength. Technically we have noticed a breakout of the uptrend so i will be monitoring a potential retrace of the trend around 145 support and resistance zone. Feel free to ask any question in the comment section. Trade safe, Joe.
Short
by JoeChampion
4
USD/JPY - yen slips after BoJ maintains policy settings The Japanese yen is trading at 1.36.83 in the European session, down 0.52%. USD/JPY fell 0.90% on Thursday but has recovered much of those losses today. Bank of Japan Governor Kuroda didn't fire any final shots at his final meeting today. The BoJ maintained interest rates at -0.1%, where they have been pegged since 2016, and didn't make any changes to its to yield curve control (YCC) policy. Traditionally, BoJ governors do not make waves at their final meeting, but there was an outside chance that Kuroda might buck the trend. Kuroda has surprised the markets in the past, most notably when he widened the yield curve band in December and jolted the markets. This time, Kuroda stayed on the sidelines and the yen responded with losses as some investors were disappointed that he didn't tweak the YCC. Kazuo Ueda takes over as BoJ Governor next month, and there is growing speculation that Ueda will change forward guidance and tweak or even abandon YCC, as distortions in the yield curve are damaging the bond markets. Ueda may not press the trigger when he chairs his first meeting in April but is expected to shift policy in the coming months. The US releases its February employment report, highlighted by nonfarm payrolls, later today. The blowout January reading of 517,000 is widely seen as a blip, although the labour market remains surprisingly resilient, despite the bite of rising interest rates. The estimate for February stands at 205,000 and a wide miss of this figure on either side will likely shake up the US dollar.  A weak reading would fuel speculation of a Fed pivot and likely weigh on the US dollar, while a strong figure would support the Fed's hawkish stance and should be bullish for the greenback. The Fed will also be keeping a close eye on wage growth, in addition to nonfarm payrolls. Average hourly earnings are expected to rise to 4.7% y/y in February, up from 4.4% y/y in January. Higher wages drive inflation higher and an acceleration in wage growth would complicate the Fed's battle to curb inflation. 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines
by OANDA
USDJPY Outlook 10th March 2023The Bank of Japan (BoJ) released an unchanged monetary policy statement, with no surprises from Governor Kuroda at his last policy meeting. As the monetary policy statement was unchanged, this disappointed the market slightly, resulting in the significant weakening of the Japanese Yen. The USDJPY spiked up from the 136 price area, breaking above the 23.60% Fibonacci retracement level at 136.40 to reach the 137 round number resistance and 61.8% Fibonacci retracement level following the release of the news. Although the price retraced lower, the USDJPY could continue trading higher toward the 137 resistance level and beyond that, the next key resistance level is at 138.
Long
by JinDao_Tai
USDJPY Outlook 9th March 2023Although the USDJPY traded significantly higher following the bullish news from the US Federal Reserve, with the price reaching the 138-round number resistance level, it has since retraced significantly to the downside and is trading below the 137-round number level. With the short term bearish trendline indicating downward pressure, look for the USDJPY to continue trading lower to retest the 136.40 (and 61.8% Fibonacci retracement level), similar to the price action overnight. However, watchout for significant price volatility tomorrow with the Bank of Japan (BoJ) due to release its monetary policy decision (and it is also Governor Kuroda's last meeting). While it is unlikely that any changes will be made to the monetary policy, the market is anticipating the potential of a surprise since it is Kuroda's last meeting. If he adjusts/removes limits on the JGB yield, the Yen could strengthen significantly, with the next key support level for the USDJPY at 135.26.
Short
by JinDao_Tai
USDJPY Outlook 6th March 2023The USDJPY reversed strongly from the 137 round number resistance level, trading lower through the session on Friday, ending the week at the 135.80 price area. This move lower, as we know was due to the weakness in the DXY, hence, if the weakness continues, the USDJPY could continue trading lower, down to retest the 135.35 key support level. The USDJPY could see significant volatility this week, given that the JGB 10yr yield had recently breached the 0.5% ceiling and the BoJ monetary policy statement is due to be released (and it is Kuroda's last meeting as Governor). If the price breaks below the immediate support level, the USDJPY could see significant downside potential, with the next key support level at the round number level of 134.
Short
by JinDao_Tai
2
Key news events for the weekIt might be a big week head for the markets. Monday CHF CPI data release. The inflation gauge for the Swiss is expected to be lower than previous, signaling a slowdown in inflation growth. Could result in some weakness in the CHF if markets anticipate no more rate hikes to come from the SNB. Tuesday Reserve Bank of Australia (RBA) interest rate decision. Another 25bps rate hike to come? However, the AUDUSD has often traded lower following the release of the news. Could the same thing happen again? Fed Chair Powell testifies during the US session. This could lead to increased volatility on the DXY, but watch what Powell says! Pivot? Or continue with the rate increases? Wednesday Bank of Canada (BoC) is set to hold rates at 4.50%. Unlikely that we'll see a surprise given how recent Canadian CPI has been released lower than previous (signaling a possible reversal in inflation). Friday Bank of Japan (BoJ) is set to announce its monetary policy decision. This is Kuroda's last monetary policy meeting as Governor. While a surprise is unlikely, he might lay the foundations for his predecessor. Expect significant volatility on the Japanese Yen. Since it is the first Friday of the month, look out for the release of the US Non-Farm Employment Change (NFP). The data shouldn't surprise like the previous month, however, some stability in the employment data could see markets reconsider the FOMC's stance on further rate hikes, leading the DXY to trade lower. Whatever the news, watch out for my daily posts on the specific currency pairs as I update you on possible setups and price levels. Also, tune in to the Daily Live Stream at 3pm (GMT+8)!
TVC:DXY
by JinDao_Tai
4
USDJPY Outlook 3rd March 2023Overnight, the USDJPY climbed steadily to the upside, reaching the recent high and round number resistance level of 137. However, the price failed to break the resistance level, retracing lower down to the current level of 136.61. While further upside could be expected especially if the DXY continues to strengthen, watch out for significant volatility on the Japanese Yen with the recent news that the Japanese bond yields have again risen above the 0.5% ceiling previously set by the BoJ. On 20th December 2022, when the BoJ increased flexibility by increasing the bond yield ceiling, the USDJPY spiked from the 137.17 level down to 133.50 within the hour. In the meantime, look for the USDJPY to consolidate along the current price level (supported by the 23.6% Fibonacci retracement level) before trading higher again with the 138 key resistance level a target level.
Long
by JinDao_Tai
4
USD/JPY dips as Tokyo Core CPI slowsThe Japanese yen has gained ground on Friday. In the European session, USD/JPY is trading at 136.17, down 0.44%. There was some positive news on the inflation front, as Tokyo Core CPI for February slowed for the first time since January 2022. The indicator was expected to rise from 4.3% to 4.5%, but instead reversed directions and fell to 3.3%. The sharp drop was not a complete surprise, as it was driven by government subsidies, including a 20% reduction in household electricity bills, which took effect in February. Without the subsidies, it's likely that the Tokyo inflation figure would have come in around 4.5%. It's unclear how long the government will continue these subsidies, which means that the inflation picture remains uncertain. The Bank of Japan has insisted that rising inflation is transient and is a result of external factors such as high commodity prices rather than domestic inflationary pressures. The central bank has insisted on maintaining its massive stimulus programme even though inflation has been on the upswing and is more than double the BoJ's target of 2%. All eyes are on the Bank of Japan, as the changing of the guard looms ever closer. BoJ Governor-elect Kazuo Ueda will take over the helm from Haruhiko Kuroda in early April. Ueda has been careful not to make any waves at his confirmation hearings, saying that the central bank's current policy is appropriate. Still, the markets aren't convinced that Ueda will maintain Kuroda's ultra-loose policy, especially with rising inflation. The BoJ's yield curve control (YCC) policy has damaged the bond markets and there is speculation that Kuroda could make a grand exit at his final meeting on March 10 and tweak YCC in order to relieve pressure on Ueda. There is resistance at 137.37 and 138.24 135.65 and 134.78 are providing support
by OANDA
Looking for a bullish breakout from USD/JPY's consolidationA bullish engulfing candle formed on Friday thanks to a hot US inflation report. The fact that incoming BOJ governor Ueda delivered a dovish message at his confirmation hearing simply adds to our bullish conviction on USD/JPY. Prices are now consolidating on the 1-hour timeframe, so we'd welcome any pullback towards the weekly pivot point to consider long setups, with the next bullish target sitting around the weekly R1 pivot (137.30). The OBV remains elevated to suggest the rally has been supported by bullish volume, so we're also on guard for a bullish breakout from the current consolidation.
Long
by CityIndex
USDJPY: Increase expected but watch end of week JPY FundamentalsAs we see the DXY continue to push up thanks to the fundamentals and potent9ial for a 0.5% rate hike, I'm expecting this pair to continue to push up. Key fundamentals out of Japan this week with inflation data on Thursday, there's also a speech on Friday by incoming Governor Ueda, not expecting policy comment, but if we get some it will likely have an impact on USD and JPY pairs. Depending on the DXY this week, and some weakness I'm expecting to continue for JPY based on JPYWCU, I'd expect we may reach the 137.5 region / where the 50MA and 100MA look about to cross, and then a drop / retracement. We saw a bearish pinbar on the daily on Friday, which does suggest a drop first, however I think this could be misleading due to the USD sell-off on Friday ahead of the long weekend. I'll be getting in with a bullish indicator on a LTF, and then out around 137 or end of day Thursday (ahead of the JPY CPI), whichever comes first. Whatever I expect volatility at the end of the week for this pair, it could drop very quickly with the fundamentals so I'll trade carefully and book profits!
Long
by Finchcliffe
1
$USDJPY: Dollar reversal?I suspect we are seeing a large scale reversal in the dollar, which will be further confirmed if CPI favors renewed hawkishness surpassing current consensus estimates (consensus was already shaken by NFP yesterday, and would be further shocked if CPI allows Powell to keep hiking for longer than expected, or even do larger hikes as well). The BOJ governor change is looming as well, and with it the retirement of YCC apparently (yield curve controls). Overall, a decent trade if you need to hedge some equity risk in your portfolio or if you are an avid Forex trader already. Best of luck! Cheers, Ivan Labrie.
Long
by IvanLabrie
2
Yen edges lower after BoJ's Ueda testimonyThe Japanese yen is slightly weaker on Friday. In the European session, USD/JPY is trading just above the 135 line. Incoming Bank of Japan Governor Kazuo Ueda appeared at a parliamentary hearing on Friday and the markets were all ears. The buzz-word from Ueda was 'continuity', which really wasn't a surprise. Ueda has already said that the current policy is appropriate and he maintained this stance at the hearing. Ueda said that ultra-low rates are needed while the economy is fragile and ruled out fighting inflation by tightening policy. With inflation running at 4%, above the BoJ's target of 2%, there is pressure on Ueda to abandon or at least adjust the Bank's yield control policy (YCC), which is being criticised for distorting market functions. Ueda treated this hot potato with caution. He acknowledged that the YCC had caused side effects but said that the BoJ should evaluate whether recent steps such as widening the band around the yield target would ease these problems. The takeaway from Ueda's testimony is that he is in no hurry to shift central bank policy. Still, there is strong pressure on Ueda to address YCC, which is damaging the bond markets. Investors should not discount the possibility that Governor Kuroda could widen the target yield band at the March meeting in order to relieve pressure on Ueda. If Kuroda doesn't act, the bond markets could respond with massive selling before Ueda takes the helm of the BoJ in April. The inflation pressures facing the BOJ were underscored by National Core CPI for January, which rose from 4.0% to 4.2%. This was just shy of the 4.3% estimate, but still the highest reading since 1981. The BoJ has insisted that inflation is temporary (remember that line from the ECB and the Fed?), and is hoping that the government's massive stimulus package, which includes subsidies for electricity, will help bring down inflation. USD/JPY is testing resistance at 134.85. Above, there is resistance at 135.75 1.3350 and 131.90 are providing support
by OANDA
GBPJPY: This pair poised for a drop / BoJ Governor voteWe've seen recent strength from JPY in preparation for the announcement of a new Governor, with nominations expected in the next few days. The currency rose this past week when it was 'leaked' that Kazuo Ueda could become the next Governor, and this could lead to a change in monetary policy. Anyone following me will note I'm weak on GBP and generally bullish on JPY in my ideas - I don't think BoE have room for hikes that can compete with other majors, BoJ do (and they seem to have managed their economy incredibly well post-pandemic). BoJ certainly has room for manoeuvre, and I'm expecting strength from the yen this year. With inflation levels higher than target, interest rates low and potentially a new Governor that is no stranger to voting for monetary tightening when needed, the landscape is there for shorting the GBPJPY. I think this pair is due a big drop, we may see the rise up to 164 to form a rising wedge, but my expectation is a fall before it reaches that point, and a big one at that.
Short
by Finchcliffe