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Forex pairs in this Article » USD/JPY (Athens)- The USD/JPY is trading almost at its daily highs, having already gained around of 100 pips since the opening of the Asian trading session.

USD/JPY moving upwards as BoJ gets ready for a response to FOMC

The USD/JPY is hovering around its daily highs, ahead of US jobless claim data (especially if we consider that last week we witnessed a heavy out of the blue dip to 292k, but one-off factors appeared to be pushing the data artificially lower). It is noteworthy to point out, that on the majors, the smallest reaction post-Fed has been seen on the USD/JPY, just 0.4% lower since the Fed decision. What’s more, the Japanese trade data was better than expected; the adjusted balance released at JPY -791 billions.

Strategic Bias on USD/JPY

Stephen Galo, on behalf of BMO FX Strategy Team, suggests that “Over the very near-term…speculation will build from here that the Fed is essentially content to view the constant flow of monthly asset purchases as already constituting a form of “QE tapering”, since the proportional rate of increase in the Fed’s balance will continue to decline from here. Versus most of the currencies the JPY should more or less remain a sell on rallies more than versus the USD until the Fed cements the idea in our heads that a reduction in QE is highly likely before year-end, or until something occurs which is big enough to drive investors away from risk.”

Technical Outlook on USD/JPY

Emmanuel Ng of OCBC Bank, observes that the USD/JPY
may remain heavy on the vulnerable dollar but positive risk appetite levels and supported JPY-crosses may however provide a counter weight to the pair.”
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