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What Next For The Yen?In Karate, offense is the best form of defence. The BoJ knows it. Japan faces a raft of economic headwinds which shows up in Yen’s performance. The BoJ intervened strongly last year to support the currency when it skirted around current levels. Yen is hovering at those levels again. BoJ is anticipated to act. Such interventions typically mark the bottom. This paper explores recent economic data to analyse the potential for monetary policy changes by BOJ. JAPANESE MACROECONOMIC CONDITIONS HAMPER YEN FROM STRENGTHENING Starting September, the Yen has trended lower relative to the USD among currency majors. The Yen has weakened the most. As described previously , BoJ’s aims to kickstart the economy onto a high growth trajectory to exit decades of painful deflation. Recent macroeconomic data indicates weakness. This reaffirms the need for continued loose monetary policy. However, a frail Yen poses a different type of challenge for the BoJ with higher import costs for fresh food and fuel. This leaves the BoJ in a predicament between loose monetary policy and intervention to support the Yen. What does recent inflation, GDP, and wage data point to? Inflation Inflation declined M-o-M in September. CPI cooled to 2.8% falling below 3% for the first time in a year. Importantly, Japan’s producer prices are now below 2% in a sign that inflation might have peaked. Consumer prices will fail to prevail above 4% for long with input prices moderating. The BoJ expects inflation to persist until March next year at current levels and to cool towards target rates in the following 12 months. GDP Growth The Japanese economy shrank 2.1% YoY in Q3. This is far below expectations of 0.6% decline and a sharp slowdown from +4.5% growth in Q2. Slow economic growth makes economic stimulus essential to sustain it. Wages Nominal wage growth continues to decline. Real wages are even more concerning. Wages have declined for the last 18 months when adjusted for inflation. Next Shunto negotiations are set to complete by mid-Jan 2024 with outcome remaining uncertain. The BoJ highlighted that wage uncertainties and price-setting behaviour pose upside risk to prices. Meanwhile, high inflation will keep impacting real wages, affecting people's ability to spend. THE BANK OF JAPAN IS STUCK BETWEEN A ROCK AND A HARD PLACE At the October monetary policy meeting, the BoJ announced changes to the bond yield cap. The Yield Curve Control (YCC) policy and range were kept unchanged. However, a small modification was made to change the 1% JGB yield cap from a rigid one to a loose reference. These changes hint at BoJ setting itself up for the eventual roll-back of the YCC policy altogether. Next BoJ policy meeting is set for December 19th. The BoJ will likely maintain stimulus and hold rates low amid feeble consumer & business spending. The policy change will be through YCC dismantling, impacting the JGB market. It will require careful planning and deft timing. Meanwhile, the BoJ may intervene to stem continued Yen weakness. The officials have expressed this sentiment over the last two weeks via warnings for participants shorting the Yen over the past two weeks. Japan’s Ministry of Finance (MoF) intervened three times last year, injecting USD 68 billion to support the Yen when it was trading near 150/USD. These interventions, unannounced, led to sharp and unexpected currency moves. Unlike previous exchange rate-based interventions, the BoJ’s current predicament revolves around volatility and public perception. Reuters reports that if Japan aims to prevent yen appreciation, the MoF will issue short-term bills to raise Yen, which is then sold in the market to weaken the currency. Alternatively, to curb Yen depreciation, authorities will tap into Japan's FX reserves, exchanging dollars for the Yen. In recent weeks, Japanese authorities have issued warnings and expressed readiness to intervene as the Yen continues to weaken, despite a moderating USD. Masato Kanda, Japan's top currency official, emphasized the urgency of their judgments and the potential for intervention, resonating with rhetorics used a year ago. MIXED SIGNALS FROM CURRENCY DERIVATIVES MARKETS Although asset managers are not positioned as net short as they were in late-September, they increased their net short positioning (weakening Yen) last Tuesday. Similarly, leveraged funds also increased net short positioning sharply last week. Options markets contrarily signal strength in the Yen. P/C ratio for CME Japanese Yen Options (JPU) is 0.42 implying two puts for every five calls. JPUs are quoted with the Yen as the base currency so call options express a view of the Yen strengthening. Moreover, bullish bets have increased heavily over the past week. Specifically, nearest monthly and weekly contracts (JPZ3 and WJ4X3) show Yen strengthening in the near term. Bullish bets in December options outnumber bearish bets by three times. Although put open interest (OI) is concentrated near current levels with the highest OI at 0.0066 (151 in USD/JPY), call OI is more spread across with a large OI at strike of 0.0069 (145 in USD/JPY) which has ballooned over the last week. This signals that options market expects Yen strengthening by next month. Finally, implied volatility on JPU is near its lowest level since March 2022. Source: CME CVOL Options skew on JPU is close to one, indicating that premiums on calls and puts are equally priced. Convexity remains elevated signalling investor interest in OTM options suggesting likelihood of sharp moves ahead. HYPOTHETICAL TRADE SETUP Given 12-month low implied volatility, a position in JPU can yield cost-effective protection against sharp Yen moves. Alternatively, with the anticipated stability in Japanese interest rates, a short futures position in CME Japanese Yen futures, as previously discussed in a paper , is a viable approach to capitalizing on Yen's expected weakening. We can tap into JPU to safeguard this position against unforeseen risks of yen strengthening from BoJ intervention. Furthermore, CME offers weekly options for Japanese Yen futures, expiring from Monday through Friday of the week. This enables investors to attain short-term exposure on a more focused scale, accompanied by lower premiums compared to monthly options. A long call option position in JPUZ3 (expiring on December 8) would benefit from a BoJ intervention. The trade setup consists of an entry at a strike of 0.0068 (JPY 147.0588) in JPUZ3 call options. These options are at a delta of 25 and expire in 30 days providing a good trade-off between low premium and adequate exposure to the underlying. As of settlement on November 17th, premium for these options stood at USD 245 at an implied volatility of 8.26%. Source: CME Options Calculator The position breaks even at 0.00682 (JPY 146.6275) and turns profitable when (a) underlying futures price increases above strike price, and/or (b) implied volatility increases. Source: CME QuikStrike MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. 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 This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. 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CME:6J1!Long
by mintdotfinance
USDJPY: Trendline breakout, wait for retestLooks like USDJPY has broken down through the rising trendline, there was a slight recovery at the backend of Friday, this indicates we could see a short retracement from here to test the trendline break, and then down. The Yen performed well at the start of Friday, I don't believe this was BoJ intervention, as they have said that they expect the fundamentals to play out - we'll see, bad data from JPY this week may necessitate intervention, however good data on Friday (PMI) will I think be enough to start the recovery process for the Yen. If Japan looks like it's going to have a soft landing then I think markets will reward the Yen with a more positive sentiment and this could mean we get a lot of good action for these crosses. I think the USD is done being bullish for now (even the hawkish speakers cannot convince the markets), so either way I think we'll see this pair fall, so monitoring LTF's for a suitable entry / rejection from the retest point. A break below 148.5 will see a more sustained move to the downside, imho.
Short
by Finchcliffe
USD/JPY slips on soft US inflationThe Japanese yen has rebounded on Tuesday with strong gains. In the North American session, USD/JPY is trading at 150.70, down 0.67%. The yen has snapped a nasty six-day losing streak which saw the currency lose 1.5%. The US dollar is broadly lower today after the October inflation report was weaker than expected. US inflation was softer than expected in October. Headline CPI eased to 3.2% in October, down from 3.7% in September and August and lower than the market consensus of 3.3%. Much of the downswing can be attributed to lower gasoline prices. On a monthly basis, headline CPI was unchanged, compared to a 0.4% gain in September and a market consensus of 0.1%. The core rate, which excludes food and energy prices, showed a more moderate decline. Core CPI fell from 4.1% to 4.0%, shy of the market consensus of 4.1%. Monthly, core CPI dropped from 0.3% to 0.2%, below the market consensus of 0.3%. The markets have responded to the soft inflation print by repricing in a pause in December at 94%, compared to 85% a day earlier. Japan's GDP is expected to have contracted in the third quarter, with a consensus of -0.4% y/y. This would be a huge downturn from the 4.8% gain in the second quarter and could have significant ramifications on monetary policy. If the economy experienced negative growth as expected, the Bank of Japan will find support for its argument that the economy is too fragile to exit negative interest rates. There has been growing speculation that the central bank will tighten policy in the near term due to persistently high inflation and signs of wage growth. A weak GDP print will provide the BoJ with a reason to continue its ultra-loose policy until there is evidence that growth is strengthening. USD/JPY pushed below support at 151.61 and is testing support at 150.82 There is support at 150.05 and 149.29
by OANDA
AUDJPY: Interesting zone, continue up or Double top reversal?We're at the top end of the range for this pair, I am expecting BoJ to start backing its currency. I've recently noticed some negative correlation between USDJPY and the other XXXJPY crosses, so where USDJPY falls the others have been more bullish. That said if the BoJ get involved it will tank all of them. I'm not 100% what I really think will happen here, I think the Friday pinbar suggests there's more upward momentum, but will be very cautious if I trade as anything against the Yen (@which is staggeringly weak against everything). I'm opting for a move up and would keep a tight and chasing SL in place.
Long
by Finchcliffe
1
YEN WATCH! 🧐Summary The Yen continues to weaken. The USDJPY is now at a 25-year high. The Details The Bank of Japan (BOJ) intervention could happen any week, meaning some big moves on JPY pairs. I am expecting at least a 500 pip bearish move on USDJPY 💥 If there is no intervention, USDJPY may reach as high as 155-160 before the BOJ changes interest rates to strengthen the Yen. The JPY is weak across the board, especially against the FOREXCOM:CNHJPY PEPPERSTONE:CHFJPY and PEPPERSTONE:SGDJPY Things to Consider Don't over-leverage JPY long positions due to your FOMO Think longer-term. The intervention move could provide only temporary strength for the Yen. The BOJ may need to hike rates before the Yen forms its lows. An interest rate hike may not happen until Q1/Q2 2024.
Short
by Samuel_Morton_Trader
USDJPY: Shorting NowNot sure if this is the big short or not yet, but looking at price action it's been a jog up to this point, rather than a sprint, this tells me we're fine to short until at least the ascending dynamic trendline that reversed the last short. We have an engulfing candle on the 1 hour, followed by a long-body doji, so I think we're going to see a push down. If we go below then that's my reversal sign for bigger lots. The problem is history tells us BoJ will intervene, this type of knowledge can force people to get in big too soon. Let's see what happens from here, SL above the last high.
Short
by Finchcliffe
USDJPY: Still waiting for BoJ InterventionI don't believe the BoJ have gotten involved yet, or if they have it's going under the radar. I believe this pair has only slipped due to USD retracement following the NFP and softer labour market data last week. With retailers now net short I think that we'll see another push back up. We have broken my rising wedge line related idea, however unless we break below 1.487 then we're still in the uptrend. I now see it as unlikely we'll get to 154 and the BoJ intervention will surely come if necessary (it may not need to if USD keeps falling). Overall no confirmation of reversal so I'm long again when I et the LTF signal, but setting 151.65 as the target with tight SL (and will keep moving it up) as I don't want to get caught in a buy up here. Let's see what this week brings.
Long
by Finchcliffe
The Bank of Japan can’t let goThis week financial markets were dominated by central banks policy decisions. While the Federal Reserve (Fed) and Bank of England (BOE) kept rates on hold, the policy board of the Bank of Japan (BOJ) decided to further increase the flexibility in its yield curve control policy. The BOJ previously set a strict cap of 1.0% for the 10-year Japanese Government Bond (JGB) yield. But it has now decided that 1% should be a “reference” (not a strict cap), which effectively allows the yield to rise above 1% when the BOJ thinks it is appropriate. The upper bound of 1% appears to be a level they can’t let go of. By doing so, the BOJ is choosing an exit path that gives them the maximum flexibility but minimum volatility around the Yen. We view this as a dovish move as consensus expectations were for the BOJ to move the cap to 1.25% rather than 1%. Japan’s remains on a narrow path One of the reasons holding back the BOJ from normalisation of policy rates, is they still believe Japan’s recovery since the re-opening in October 2022 remains on a narrow path as it relies heavily on tourism, while the broader services sectors have yet to pick up significantly and manufacturing activity has been hampered by soft exports. Japan’s flash PMI readings for October showed us a bifurcated economy where the services sector is stronger than the manufacturing sector. Manufacturing PMI clocked in at 47.6, which is in contraction territory. Services PMI was 51.1, which is down from last month’s reading of 53.8 but is still in expansion territory, no doubt helped by fiscal stimulus and the accommodative monetary policy environment. BOJ on the lookout for an intensified virtuous cycle between wages and prices BOJ governor Ueda indicated that the BoJ will be monitoring the upcoming spring union-employer wage negotiations. A strong outcome could catalyse the earlier attainment of sustained inflation in Japan, but overall, Japan’s recovery isn’t strong enough yet for employers, especially small enterprises, to meaningful support wage hikes in the broad economy. While headline inflation bolted north of 4% in January 2023, it appears to have peaked and has begun receding. While core inflation remains around the 4% mark. The Producer Price Index (PPI) slowed to 2% annually in September suggesting a stabilization or even drop in CPI ahead. The BOJ revised its outlook for core inflation (all items less fresh food and energy) to 3.8% in FY23, 1.9% for FY24 and 1.9% for FY25. The BoJ stated that the inflation uptick “needs to be accompanied by an intensified virtuous cycle between wages and prices”. The Yen is unlikely to appreciate under BOJ’s policy change owing to the large gap in interest rates between the US and Japan. The direction of the Yen matters for Japanese equities owing to Japan high export tilt. The exporters stand to benefit amidst a weaker Yen. Fire power abounds for Japanese equities Japanese equities had a strong first half in 2023, attaining 33-year highs. Yet valuations at 15.7x price to earnings ratio (P/E), still trade at a 30% discount to its 15-year average providing room to catch up. More importantly, earnings revision estimates in Japan are currently the highest among the major economies. Earnings yield at 4.07% for the Nikkei 225 Index has been trending above bond yields 0.947% for 10 Year JGBs , keeping the well-known TINA (There is no Alternative) trade alive in favour of Japanese equities. Tailwind from corporate governance reforms Tokyo Stock Exchange’s (TSE) call for listed companies to focus on achieving sustainable growth and enhancing corporate value is beginning to bear fruit. The call was aimed at companies with a price to book (P/B) ratio below one. Those companies were asked to develop a plan for improvement, disclose and then implement and track its progress. The progress has been encouraging with 31% of companies on the prime market making a disclosure of their plan . Large companies with a price to book ratio below one have been more proactive with disclosure. Historically cash-heavy Japanese companies face increasing pressure to improve their numbers, possibly by funnelling historically high excess cash reserves into increased buybacks or dividends. Conclusion Inflation has been missing in Japan for more than a decade. So now that it has arrived aided by the post pandemic pick up of the Japanese economy, policy makers are not in a rush to obliterate it. With wage growth lagging behind inflation, the Bank of Japan does not appear ready to wean itself from Yield Curve Control until a more intensified virtuous cycle is observed between wages and prices. The BOJ’s policy decision this week is unlikely to allow the appreciation of the Yen, which should continue to provide a competitive advantage to Japanese exporters. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
ECONOMICS:JPIRYY
by aneekaguptaWTE
Boy that was a week!What a week that was! The dance around 150 certainly didn't disappoint. After the break and failure the week prior which continued on Monday, I thought that was it, that price gave it a good shot but ultimately failed, and would perhaps settle below. To nobodies surprise then when the BoJ held rates at -0.10% that we made almost a straight line move back above the once solid wall. So severe was the buying, I wouldn't have blamed anybody buying dips on Wednesday. The top was just over 151.700, and despite a small bounce on Thursday lunch, we spent the rest of the week grinding back towards 150. I don't think the Fed decision can really be to blame, it seemed almost certain we'd get a pause, in fact the market mostly agreed in the minutes after the release with a very muted reaction. Today's jobs numbers was a different story, seeing an 80 pip decline. The past 3 days have almost all but wiped out the BoJ fuelled push giving us a messy looking Daily chart which is no longer respecting the uptrend nor 150 in any meaningful capacity. Heading into next week i'll be watching to see where price settles. Give everybody the weekend to digest what happened and follow the price action Mon/Tue and let that inform an entry. Hope you all had a great trading week, and I'll see you in a couple days.
by RuckSack
EURJPY H4 | Bullish momentum to extend?EUR/JPY is falling towards a pullback support and could potentially bounce off this level to climb higher. Buy entry is at 159.764 which is a pullback support that aligns close to the 38.2% Fibonacci retracement level. Stop loss is at 159.281 which is a level that aligns with the 50.0% Fibonacci retracement level. Take profit is at 160.847 which is a swing-high resistance. High Risk Investment Warning Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd, previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘TFA Global Pte Ltd’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by TFA Global Pte Ltd. The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants.
Long
by FXCM
USD/JPY: Anticipating Downward Movement at Strong ResistanceUSD/JPY is one of the most traded currency pairs in the world. The value of the USD/JPY pair is quoted in Japanese yen per one U.S. dollar. For traders, it is important to note that the pair is currently at a strong resistance level and is expected to move downwards. Outlook According to, the USD/JPY pair is expected to face resistance at the 151.70 area, which is its highest level since October 2022. The YTD peak could also offer some resistance to the USD/JPY pair ahead of the multi-decade top. The Bank of Japan's policy of patience sent the yen to an all-time low, and the Japanese authorities are always in close communication with U.S. counterparts on currencies and share a mutual understanding that excessive moves in the currency should be avoided. Therefore, traders should keep an eye on the pace of the decline in the Japanese yen. Fundamental Analysis The unwavering stance on negative rates by the Bank of Japan puts a spotlight on USD/JPY movements, amid whispers of potential interventions. The interest rate differential between the policy rates of the Federal Reserve and the Bank of Japan (BoJ) is an important influence on the USD/JPY exchange rate. Higher interest rates make a currency relatively more attractive because they allow for higher returns on investment. Technical Analysis The USD/JPY pair is currently at a key resistance level of 151.93. A firm break above this level will target 100% projection of 129.62 to 145.06 from 137.22 at 152.66. However, for the shift to lead to a bullish trend, the price must start making higher highs and lows. That means a break above the 150.75 resistance level. Otherwise, the price might start a period of consolidation near the 150.00 key level. Conclusion In conclusion, the USD/JPY pair is currently at a strong resistance level and is expected to move downwards. Traders should keep an eye on the pace of the decline in the Japanese yen. The interest rate differential between the policy rates of the Federal Reserve and the Bank of Japan (BoJ) is an important influence on the USD/JPY exchange rate.
Short
by fardycurry
3
USDJPY H4 | Falling to Fibo confluence supportUSDJPY is falling towards a pullback support and could potentially bounce off this level to rise towards our take-profit target. Entry: 150.433 Why we like it: There is a pullback support that aligns with a confluence of Fibonacci levels i.e. the 38.2% retracement and the 61.8% projection levels Stop Loss: 149.740 Why we like it: There is a level that aligns with the 100.0% Fibonacci projection level (keeping a relatively tight Stop Loss due to potential intervention measures by the BoJ) Take Profit: 151.703 Why we like it: There is a swing-high resistance level Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Long
by VantageMarkets
Yen Weakens against Dollar as BOJ Adjusts Monetary PolicyThe Japanese yen weakened beyond 151 against the mighty dollar, thanks to the Bank of Japan's (BOJ) recent adjustments to its monetary policy. The winds of change are blowing in our favor, and it's time to seize this moment and take action! By going long on USDJPY, we can potentially capitalize on this favorable market trend and secure significant gains. The BOJ's limited adjustments to their monetary policy have created a fertile ground for us to explore and maximize our profits. Why should you consider going long on USDJPY, you ask? Well, let me break it down for you: 1. BOJ's Monetary Policy Adjustments: The BOJ's recent tweaks to their monetary policy indicate a shift towards a more accommodative stance, which typically leads to a weaker yen. With the yen already breaching the 151 mark against the dollar, this provides an excellent opportunity to ride the wave of yen depreciation. 2. Favorable Dollar Strength: The US dollar has been flexing its muscles lately, exhibiting strength against various major currencies. By pairing it with the weakened yen, we have a powerful combination that can potentially amplify our gains. 3. Potential for Increased Volatility: As the yen weakens and the market reacts to the BOJ's policy adjustments, we can expect increased volatility in the USDJPY pair. For experienced traders like us, volatility often translates into profitable opportunities. Now, it's time for action! Take advantage of this exciting market development and consider going long on USDJPY. Remember, the key to success lies in seizing opportunities when they arise, and this is undoubtedly one of those moments. As always, remember to conduct thorough research, employ proper risk management strategies, and consult with your trusted financial advisor or broker before making any trading decisions. Wishing you fruitful trades and a prosperous journey in the forex market! Ready to ride the wave of yen depreciation? Don't miss out on this incredible opportunity! Take action now and go long on USDJPY to potentially maximize your profits. Remember, the forex market waits for no one, so seize the moment and make your move today!
Long
by bryandowningqln
Heavy Dollar news day tomorrowWhat an insane session for USDJPY! We know the ExMo is low due to the compression we've seen, but even compared to more normalised figure, what we've seen today has broken all expectations. There are two questions going forward. The most immediate is the Dollar news we have scheduled for Nov 1st. Those being ADP at 12:15pm London (due to daylight savings) followed by the Fed rate decision at 6pm. The second is whether or not the BoJ have any other tools to alleviate the Yen weakness other than simply intervening like we've seen before. Let's tackle the new first. I wouldn't expect ADP to cause much of a stir given the Fed decision always overshadows anything else, and if the Fed holds at 5.50%, then I wouldn't expect anything other than a small bump. Given the move we've seen today I think some form of relax to happen, possibly with a slight downward trajectory for profit taking....possibly we just slide a little lower into the end of the week? As for the BoJ, I'm nervous above 150. I'll take it a day at a time above here and be mindful of any macro factors that change the longer term outlook for either the Dollar or Yen. But it seems like the only mechanism Japan has to stop the devaluation is to inject a whole bunch of money into buying the Yen. Be careful out there and I'll see you tomorrow.
by RuckSack
2
ZARJPY: My Bearish Speculation Against The JPY Carry TradeWe have some Bearish Divergence on the ZARJPY, but the main reason I entered this trade was to speculate against the JPY Carry Trade and front-run the potential flight we may get back to the Yen if Japanese Yields were suddenly to go up or even become uncapped during the BoJ meeting tonight. I could have shorted EURJPY, GBPJPY, AUDJPY, or USDJPY instead, but I feel ZARJPY may give a more violent reaction as it is a currency that has generated some of the highest yields vs the JPY thus far, and if that yield were threatened, I think it would move down quite fast compared to the other pairs. I guess as a side note: This might end up being a Bearish 5-0 in the long run.
Short
by RizeSenpai
2
USD/JPY holds below 150 ahead of BoJ meetingThe Japanese yen is drifting on Monday after pushing the US dollar back below 150 on Friday. In the European session, USD/JPY is trading at 149.71, up 0.05%. The Bank of Japan holds its two-day meeting beginning on Monday and there's plenty of anticipation around the meeting. BoJ meetings were once dreary affairs that barely made the news, but that has changed in the era of high inflation. The central bank has been an outlier with its ultra-loose monetary policy, insisting that inflation has been transient. The BoJ recently tweaked its yield curve control (YCC) program, widening the trading band for 10-year Japanese government bond yields to 1%, which sent the yen sharply higher. There is pressure on the BoJ to again raise the trading band as yields have risen close to 0.90%. The surge in US Treasury yields has widened the US/Japan rate differential, which has weakened the yen. If the BoJ does not take any action at this meeting, the yen could weaken further, raising the risk of Tokyo intervening in the currency markets. One move the BoJ is expected to take is to revise upwards its quarterly inflation forecasts. The latest Tokyo Core CPI reading rose from 2.5% to 2.7% y/y, an indication that underlying inflation remains sticky. If the BoJ does raise the inflation forecasts, it would signal a move toward monetary policy normalization, which could shore up the struggling yen. The Federal Reserve has sounded hawkish about inflation and received support for its stance from Friday's core PCE price index, which rose 0.3% in September, up from 0.1% in August and the highest level in four months. There are some inflation risks heading into next year, but the markets have priced in pauses in the November and December meetings. 149.05 and 148.45 are providing support There is resistance at 149.91 and 150.51
by OANDA
AUDJPY: Big week for JPY Yen this weekThere's talk of the BoJ lifting the limit on yields to 1.5% from 1% this week, which would be a very strong catalyst for the Yen to start showing some strength. We can see that this pair does not have any direction at the moment, trading in a flag pattern, but I don't see this as either bullish or bearish at the moment. I'm not sure how or when or if to trade this but monitoring, my idea is based on BoJ protecting its currency generally, I am seeing the Aussie getting stronger so think we'll go up before coming back down, let's see...
Short
by Finchcliffe
USD/JPY edges lower, Tokyo Core CPI risesThe Japanese yen has steadied after three straight days of losses. In the European session, USD/JPY is trading at 150.11, down 0.19%. Tokyo Core CPI climbed 2.7% y/y in October, above 2.5% in September which was also the consensus estimate. The index, which excludes fresh food is a key indicator of inflation trends in Japan and is closely monitored by the Bank of Japan. Tokyo's headline CPI also rose in October, from 2.8% to 3.3%. The Bank of Japan will find it hard to ignore these hotter-than-expected inflation readings. The timing of these releases is awkward for the BoJ, which holds its policy meeting on Oct. 30-31. Underlying inflation is proving to be stickier than expected and BoJ policy makers may have to revise upwards their inflation outlooks for 2023 and 2024. High inflation is a risk to Japan's recovery, putting pressure on the BoJ to make some kind of move at the meeting. The central bank will have a busy agenda at next week's meeting. Aside from stubbornly high inflation, the BoJ will have to decide whether to tweak its yield curve control (YCC) program and what to do about the falling yen. The Japanese currency breached the symbolic 150 line this week for the first time since October 3rd, raising speculation that the BoJ could shift its policy or even intervene in the currency markets. Tokyo has responded to the yen breaching 150 with the usual verbal intervention, warning investors not to sell the yen. The BoJ won't be providing any advance warning about a currency intervention, so traders should remain on alert. For those doubting US exceptionalism, the superb US GDP of 4.9% in the third quarter was proof in the pudding of a robust US economy. This was the fastest growth rate since Q4 of 2021, boosted by strong consumer spending in the third quarter. The sharp rise in growth hasn't changed market expectations with regard to rates, which have priced in pauses at the November and December meetings. USD/JPY is testing support at 1.5017. Below, there is support at 149.67 There is resistance at 1.5049 and 1.5099
by OANDA
NZD slides against the Japanese YenThe New Zealand Dollar (NZD) is trading bearish against the Japanese Yen (JPY) at 87.386 on Friday, October 27, 2023, following comments from Japan's Chief Cabinet Secretary Taro Matsuno that the Bank of Japan (BoJ) is expected to conduct appropriate monetary policy. Matsuno's comments come amid rising expectations that the BoJ will eventually tighten monetary policy in response to rising inflation in Japan. The BoJ has been maintaining an ultra-loose monetary policy stance for many years, but this has led to a significant weakening of the JPY in recent months. The NZDJPY currency pair has been under pressure in recent weeks as investors have priced in the possibility of a more hawkish BoJ. The pair has fallen by over 5% since the start of October. The bearish outlook for NZDJPY is further supported by the technical outlook. The pair has broken below a key support level at 88.00, and is now on track to test the next support level at 86.50. Factors Weighing on NZDJPY There are a number of factors weighing on NZDJPY at present, including: Expectations of BoJ tightening: The BoJ is expected to be one of the last major central banks to tighten monetary policy, which is putting downward pressure on the JPY. Rising inflation in Japan: Japan's inflation rate has been rising in recent months, which is putting pressure on the BoJ to tighten monetary policy. Global risk aversion: Global investors are currently risk averse, which is leading to a sell-off in riskier assets such as the NZD. Weak New Zealand economic data: The New Zealand economy has been slowing in recent months, which is weighing on the NZD. Technical Outlook for NZDJPY The technical outlook for NZDJPY is bearish. The pair has broken below a key support level at 88.00, and is now on track to test the next support level at 86.50. If NZDJPY breaks below 86.50, it could fall to 85.00 or even lower. Trading Strategy Traders who are bearish on NZDJPY could consider shorting the pair at current levels. A stop loss could be placed above the recent high at 88.00. A profit target could be placed at 86.50 or 85.00. It is important to note that the foreign exchange market is volatile and prices can move quickly. Traders should always use risk management techniques when trading currencies.
Short
by masterclass618
USDJPY: Thoughts and Analysis Today's focus: USDJPY Pattern – Ascending Triangle Break (BoJ Intervention?) Support – 149.28 - 148.43 Resistance – 149.90 - 150.16 Hi, and thanks for checking out today's update. Today, we are looking at the USDJPY on the daily chart. Speculation continues as to whether we will see intervention from the BoJ as the USDJPY continues to trade above 150. Currently, the breakout of an ascending triangle pattern yesterday continues to confirm today as buyers continue the run above 149.90 resistance and 150. Pricewise, things look firm on the buyer side, but will we see any surprises today with BoJ intervention? Last time price was above 150, we saw a 1.75% decline. Could another round be on the cards if prices contnue to push higher? Good trading.
by Eightcap
USDJPY: The Short - when??I think that retail traders in the main are expecting this pair to crash from 150, I have been, and it may well do (as per my related idea below)... Commentators and past experience suggests that the BoJ will intervene around 150 to 151.5 because they have to, due to the debt relationship with the USA, they're stuck between a rock and a hard place. We all know what happens when retailers think they know best...I'm starting to think that we'll push higher to 154 before the dump. I think the current global conflict will help the USD get there, but that level will be unsustainable for Japan so will come back down with a bang. In the meantime I'm still day trading up and down and catching some moves on this pair, but I'm starting to think the big one is a little way off yet, let's see...
Short
by Finchcliffe