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USDJPY FOMC Prep 14th JuneIf the FOMC does pause on further rate hikes as forecasted, this is likely to cause further weakness in the DXY (read DXY analysis) Weakness in the DXY could see the USDJPY trade lower. The USDJPY has been range bound since the start of June, trading between the resistance of 140.40 and support of 138.74. Currently trading along the 140 price level, weakness in the DXY could see the price reverse lower, back down to the support level. Similar to the price action on the 5th of June. A surprise rate hike from the FOMC could see the USDJPY rise, but the upside would be limited with the next key resistance level around 141 (the previous swing high at the end of May) and also with the increasing belief that any surprise rate hike would be the last to come from the FOMC.
Short
by JinDao_Tai
USDJPY: Key Levels to Watch This Week 🇺🇸🇯🇵 Here is my detailed structure analysis for USDJPY. Horizontal Key Levels. Resistance 1: 140.63 - 140.93 area Resistance 2: 142.06 - 142.46 area Support 1: 138.48 - 138.80 area Support 2: 137.38 - 137.95 area Support 3: 135.20 - 135.49 area Support 4: 132.95 - 134.27 area Vertical Key Levels. Vertical Resistance 1: Rising trend line Vertical Support 1: Rising trend line Consider these structures for pullback/breakout trading this week. ❤️Please, support my work with like, thank you!❤️
Long
by VasilyTrader
10
USD JPY - FUNDAMENTAL ANALYSIS2023-2024 Exchange Rate Forecasts From MUFG Japanese Yen: Long-Term Pressure for Yen Gains As far as the yen is concerned, the Bank of Japan has continued to resist policy tightening, but MUFG suspects that the position could change very quickly. It notes; “We suspect the BoJ could pivot quickly and alter YCC without much warning.” The bank also expects that the underlying inflation profile has increased which could have important implications for the central bank and yen. It adds; “The sense that this time could be different is certainly building in Japan.” An eventual policy shift is expected to boost the heavily-undervalued yen.
Short
by thunderpips
USDJPY approaches key decisive area The USDJPY has been trading strongly to the upside since early May with no significant corrective move to the downside. Now, with the 50MA again crossing below the 200MA and price action showing bearish momentum, look for the USDJPY to break below the 138.75 support level formed last Friday. Along with a downward movement on the RSI, if the USDJPY breaks below 138.75, the price could fall toward the next support level of 137.50. Although there is another key support level at 135.55, this might be too low as a possible target level.
Short
by JinDao_Tai
EURJPY H4 - Short SetupEURJPY H4 Trading on and around that huge 150.000 psychological number at the moment. Price hopefully looking to reject this area on the LTF to give us a signal that bears may come back into play. The likes of GBPJPY also looking attractive for possible shorts, but not a huge amount of volume being seen over the last couple of weeks. But this week could be the week we start to see the JPY gain strength in line with recent consolidation and exhaustion.
Short
by Trade_Simple_FX
1
USD JPY - FUNDAMENTAL ANALYSISThe Bank of Japan's (BoJ) monetary stance remained unchanged as they didn't convene, keeping the key policy rate at -0.10% and the 10-year yield at around zero percent due to Yield Curve Control. Several factors contributed to the Yen's weakening, including reassessments of the Federal Reserve's monetary tightening outlook, which generally boosted the dollar. The 10-year breakeven rose significantly, hinting at rising inflation expectations in Japan. With inflation hitting new highs and property values also increasing, real yields in Japan are falling. Despite rising inflation, the BoJ's apparent lack of urgency to change its current monetary stance has also influenced the Yen's movement. However, there are suggestions that the BoJ might change its Yield Curve Control without much warning. With possible political factors also in play, the overall view, according to analysts at MUFG, is of limited scope for further rise in the USD/JPY exchange rate, given the Fed's projected pause in June. Japanese Yen Performance in May The Yen's performance against other major currencies in May has been mixed, the Japanese currency saw a depreciation against the US dollar but a strengthening against the Euro. "In May the yen weakened further versus the US dollar in terms of London closing rates from 136.09 to 139.68" says Derek Halpenny, Head of Research, Global Markets EMEA and International Securities at MUFG. Bank of Japan's Monetary Stance Despite the fluctuations, there hasn't been a change in the monetary policy of the Bank of Japan (BoJ). The central bank's current stance remained steady with a key policy rate of -0.10% and the ten-year yield managed within a +/- 50bps range due to Yield Curve Control (YCC). "The BoJ did not meet in May and hence its current monetary stance was unchanged with the key policy rate at -0.10% and YCC restraining the 10-year yield within a range of +/-50bps around zero percent," says Halpenny. Factors Influencing the JPY's Exchange Rate Performance Several macroeconomic dynamics influenced the Yen's performance in May. A crucial contributor to these dynamics was a reappraisal of the Federal Reserve's perspective on monetary policy tightening in the US, which resulted in a strengthening of the US dollar. "Firstly, the reassessment of the outlook for monetary tightening by the Fed helped lift the dollar in general in May and that helped propel USD/JPY higher," Halpenny states. He adds, "From close to a zero probability, OIS pricing now indicates around a 50% probability of another rate hike by the Fed." Furthermore, the Yen's value was impacted by domestic economic indicators. There's been a significant increase in real yields (the returns on investments that have been adjusted for the effects of inflation) in Japan, accompanied by a surge in inflation expectations. "Real yields have been falling sharply in Japan with inflation expectations jumping. The 10yr breakeven jumped 20bps in May and reached close to 1.00%, the highest since June 2022," Halpenny notes. Impact of Asset Price Inflation The rising inflation in Japan wasn't just limited to goods and services, but also included a surge in asset prices. A broad spectrum of assets, including the Topix Index, property prices, and land prices, experienced significant gains. The TOPIX, or Tokyo Stock Price Index, is a broad stock market index that tracks all domestic companies listed on the First Section of the Tokyo Stock Exchange (TSE), the largest stock market in Japan. It includes a wide range of company sizes and sectors, making it a comprehensive barometer of the overall Japanese equity market. "The Topix Index surged 3.6% in May in contrast to a 0.2% gain in the S&P 500. Property prices and land prices are also moving higher in Japan," says Halpenny. Despite the rising inflation and falling real yields, the BoJ appears untroubled about the situation and is in no hurry to change its monetary policy. "Adding to yen selling is the clear sense of a lack of urgency from Governor Ueda to change the current monetary stance," says Halpenny. However, there are signs that the BoJ might spring a surprise and make quick alterations to its YCC policy. "We suspect the BoJ could pivot quickly and alter YCC without much warning," Halpenny states. In the backdrop of all these factors, the outlook for the Yen seems nuanced. The combination of increasing inflation, changing monetary policy stances, and political factors all paint a picture of restrained potential for further appreciation of the Yen against the US Dollar, especially with a projected pause in the Federal Reserve's policy actions in June. "With the Fed set to pause in June, we see limited scope for USD/JPY to move higher from here," Halpenny concludes.
Short
by thunderpips
3
USD JPY - FUNDAMENTAL ANALYSISUSD/JPY has reversed from a high near 141, largely on the back of shrinking expectations that the Fed would hike in June. That is now priced with a 25% probability rather than a 70% probability attached to it last month. We have noted that the current environment should continue to see interest in carry trade strategies – where the Japanese yen scores poorly. However, USD/JPY looks overvalued relative to the terms of trade story – which is much better for the yen than a year ago. In addition, there is still the risk that the Bank of Japan surprises on 16 June by further normalising its Yield Curve Control policy. That would be a yen positive. And thus it would not be a surprise to see speculator investors trying to re-position short USD/JPY above 140 – even if such a strategy has already proved painful this year.
Short
by thunderpips
2
✨NEW: USDJPY ✨ SWING TRADE ✨SLO @ 144.05 ⏳ SSO @ 138.33 ⏳ TP1 @ 134.00 (shaving 25%) TP2 @ 125.50 (shaving 25%) TP3 @ 119.25 (shaving 25%) TP4 @ 110.75 (shaving 25%) TP5 @ 103.85 (shaving 25%) BSO @ 101.66 ⏳ BLO @ 99.66 ⏳ ADDITIONAL INFO: TP1 @ 134.00, before Pivot Low TP2 @ 125.50, at Mid-Pivot TP3 @ 119.25, at Major Support TP4 @ 110.75, above Upper Demand TP5 @ 103.85, above Lower Demand BSO @ 101.66, after Price Action drops below TECHNICAL ANALYSIS: As of June 1, 2023, the USDJPY is trading around 139.80. The RSI is overbought, which indicates that the market is due for a correction. The MACD is also starting to turn down, which could be another sign that the trend is about to change. ⚠️Be mindful that the moving averages are all sloping upwards, which is a bullish sign. Overall, the technical analysis for the USDJPY is mixed. There are some bullish signs, however the bearish signs seem to be forging ahead. Traders should be cautious and wait for a clear downtrend to emerge before taking any short trades. Here are some of the key levels to watch for: * SUPPORT: 139.45 ⚠️ For a more aggressive approach, you can place a Market Order to Sell once price opens and closes below Support * RESISTANCE: 140.65 ⚠️ For a more aggressive approach, you can place a Market Order to Buy once price opens and closes above Resistance If the price breaks below the support level, it could signal a change in trend to the downside. If the price breaks above the resistance level, it could signal a continuation of the bullish trend. Here are some of the factors that could affect the USDJPY in the near future: * The US Federal Reserve's interest rate decision on June 15. * The Japanese government's economic data releases. Traders should keep an eye on these factors and adjust their positions accordingly.
Short
by ProfessorCEWard
Why we may soon see some JPY strengthThe JPY is undervalued... Unlike other global economies, Japan is not facing an inflation crisis or below 50 PMI figures. The Yen has also been victim to some large bearish moves over the last few years, which are due a retrace move. In my opinion, it is starting to look like a good buy from both a fundamental and technical point of view. As a safe haven currency, it could also see some strength with the nearing Western recession, if the recession ever comes! All is not roses, though. GDP growth is low and unemployment is too low... There is also the issue with the BOJ's currently monetary policy. The challenge is, which pair do you short? The JPY against the EUR or GBP is a strong fundamental trade, but the swap rates will eat away at profits on any long-term trade. The CHFJPY has a move attractive swap, though still negative, but you then lose the safe haven bias of trading both the CHF and JPY. Speaking of CHFJPY, price has just broken a possible turnaround area on the 1 hour chart, which could be a signal of some coming JPY strength and ***JPY downside. For longer-term trades, perhaps a Yen ETF or currency index trade is best... AMEX:YCL AMEX:FXY OANDA:CHFJPY
Short
by Samuel_Morton_Trader
USD JPY - FUNDAMENTAL ANALYSISThe US dollar (USD) has staged a comeback against the Pound Sterling (GBP) and Euro (EUR) over the past few weeks, but foreign exchange analysts at MUFG still consider that medium-term depreciation is the most likely outcome. The bank considers that the US Dollar exchange rates are overvalued, especially against the Japanese Yen (JPY) and net capital flows are likely to be less supportive. It also considers that the Euro-Zone and Chinese outlooks are more favourable, especially given that gas prices have declined sharply. MUFG also expects the Fed will cut rates before the ECB while the Bank of Japan will tighten policy. Monetary policy will inevitably be a key aspect. Although the immediate debate is still surrounding the potential for further interest rate hikes, MUFG expects the debate will switch to the potential for a Federal Reserve policy reversal as the US economy deteriorates. According to the bank; “ The Fed will be cutting rates prior to the ECB. Inflation in Europe is stickier due to energy and food prices and the Fed will have much more scope to respond once economic conditions in the US weaken further from here. ” After an extended period of quantitative easing, MUFG also expects that the ECB quantitative tightening programme through bond sales will put upward pressure on longer-term yields and support the Euro. Global Growth Trends Still Favourable MUFG notes that previous forecasts of an extended UK recession have been revised away and the Euro-Zone has also been resilient. As far as China is concerned it adds; “ Recent data has disappointed, in particular on the manufacturing side of the economy, but pent-up domestic demand likely has further to run which will act as a source of global growth this year. ” Although market sentiment has been more cautious, it expects overall growth dynamics will not favour the US dollar as Asia rebounds. A related issue is the key area of energy prices. The jump in energy costs last year was a key reason why agencies such as the IMF and central banks were so negative surrounding the European economic outlook last year. Gas prices have, however, declined sharply with a slump from over 90% from the peak and close to 2-year lows. Gas storage levels are also at very high levels in historic terms ang MUFG expects storage levels will hit 100% in the summer. In this context, lower gas prices will improve the growth outlook and strengthen the trade outlook. The Bank of Japan has resisted tightening monetary policy, but MUFG notes that the economy is strengthening and inflation has increased. According to MUFG; “ we maintain that YCC has passed its sell-by-date and while it remains unclear whether price stability at 2% can be achieved, the BoJ will still move to widen the band or scrap it completely. ” The bank expects that the yen will strengthen sharply if the Bank of Japan lets yields increase which will drag the dollar lower. Negative Long-Term US Debt Dynamics The immediate focus is on the US debt ceiling and political brinkmanship ahead of early June when the US Treasury will run out of cash. These short-term dynamics are mixed for the US dollar with concerns over the economy, but potential defensive support if risk appetite deteriorates. MUFG focusses on the underlying debt dynamics and the potentially unsustainable situation. MUFG notes that the budget deficit in the first seven months of fiscal 2022/23 amounted to $928bn from $360bn the previous year. On a longer-term view, in considers the debt dynamics will be potentially negative for the US currency. De-Dollarization Hype Although MUFG considers that the de-dollarization rhetoric is rather more hype than substance, there is still the risk that long-term confidence in the dollar will decline with scope for some further increase in Euro and yuan central bank reserve holdings. MUFG also notes that there has been strong central bank gold buying and it expects this trend will continue. The bank also sees a risk that the US use of financial sanctions will discourage official players to hold reserves in the dollar due to fears over asset freezes. MUFG notes that there has been an extended period of Wall Street out-performance, but expects this trend will reverse and net capital flows will be less supportive for the US currency. It adds; “ We see a renewed drop in US equities as investors position more assertively for US recession. ” Japan’s Nikkei 225 index has posted a 32-year high and the German DAX index has hit a record high. It also sees scope for a sustained rebound in emerging-market equities after an extended period of under-performance. It adds; “ A reversal of the current period of deep EM undervaluation poses downside risks for the USD in the medium-term. ” Long-Term Peak, Dollar Overvalued MUFG notes that the dollar last year reached the highest level for over 20 years. It also notes that at the October peak the currency index was 2 standard deviations stronger than the average over the past 40 years. It adds; “ Similar extreme levels of USD overvaluation were last recorded in the early 2000’s and mid-1980’s and subsequently proved to be long-term bearish turning points for the USD. ” The bank also considers that the dollar is substantially overvalued, especially against the yen, increasing the likelihood of mean reversion.
Short
by thunderpips