USD/JPY is on fire, highest since late Jan

By FXstreet.com | August 24, 2014 AAA

FXStreet (Bali) - USD/JPY traded as high as 104.37-40 during interbank hours, while opening slightly lower at 104.26 at 21GMT retail's hours, yet still significantly higher than its 103.93 NY close level, as a response to Yellen's speech at Jackson Hole.

The rather dovish comments by BOJ Kuroda over the weekend, via Reuters, noting that the Central Bank may have to ease policy for 'some time' to slay deflation, adding that they might be just 'halfway' through to beat deflation, coupled with pressures building - Reuters weekend piece - for Fed official to take a more hawkish stance amid improved economic indicators in the US, added extra bullish pressure to the USD/JPY exchange rate over the weekend.

Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes: "The hourly chart is showing a strong upward momentum coming from technical readings, and 100 SMA at 103.45, widening the distance with 200 one at 102.90, usually a good sign of a trendy move. In the 4 hours chart the upside is also favored with the RSI bouncing higher from its 70 level, and momentum regaining the upside well into positive territory. There’s a long term descendant trend line coming from August 1998 monthly high of 147.68, at 105.25 for this August, and the level will likely act as a magnet before some profit taking triggers a downward correction."

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