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Japaneseyen

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
CHFJPY: Buy this pullback on the 1D MA50.CHFJPY is trading inside a Channel Up for the past 12 months and currently pulling back after touching the 2.0 Fibonacci level. With the 1D time frame technically neutral (RSI = 53.315, MACD = 1.420, ADX = 33.250), the closer the price gets to the 1D MA50, the stronger of a buy opportunity it becomes. The fractal of July-August 2022 indicates that the next HH of the Channel Up should be on the 2.618 Fibonacci level at 160.000. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
Long
by InvestingScope
3
AUDJPY: Rejection on 1D MA200 and Channel's Top. Sell.AUDJPY has now had two rejections in less than a week on the 1D MA200, which is also at the top of the six month Channel Down pattern. The 1D technicals have already turned neutral (RSI = 50.136, MACD = 0.500, ADX = 19.362), the 1D RSI has been trading sideways inside a Rectangle while the price was on HH/ HL, which indicates a Bearish Divergence and the confirmation for a complete bearish reversal will come if the price crosses under the 1D MA50. This is technically the bearish leg to the new LL of the Channel Down. We are targeting the S3 (TP = 86.050). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
Short
by InvestingScope
5
GBPJPY approaching the most optimal sell level.The GBPJPY pair is approaching the Inner Higher Highs trend-line that is in effect for more than a year (since April 20 2022) on a similar Channel Up (green) like the ones of October 2022 and March - April 2022. The 1D RSI is almost overbought, and the 1D MA50 (blue trend-line) has been supporting since March 28. We are starting a sell sequence with the 1D MA200 (orange trend-line) as our medium-term target with a projected contact at 166.500. Notice how common it is for the pair to peak when the 1D RSI double tops. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
Short
by TradingShot
7
USDJPY the week ahead : Three white Soldiers seen at USDJPYThis is a follow-up post of our previous analysis with USDJPY. As we expected the currency pair given breakout at the level of 139/140. It has formed a Doji candle on one day chart, gave confusion to retail traders as that Doji was formed after continuous bull candles and appeared nearby the resistance area. It was able to manage to give a breakout and stay strong above 140 levels. After the breakout, it has formed three white soldiers which is indicating a strong buy towards the said target of 145 / 150. Expecting the first target by the NFP data release date ( First Friday of June month ) Weekly movement Predictor : Monday = Neutral/ Slight Bearish ( US holiday: Memorial Day ) Tue, Wed = Bullish Thursday = Bearish Friday = Ultra Bullish. You can use stop loss or USE trailing Stop loss 136 region where 20EMA is seen.
Long
by Edwindxb
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
EURJPY: Excellent sell opportunity.EURJPY is approaching the top of the one year Channel Up pattern with the 1D time frame on strong bullish technicals (RSI = 63.669, MACD = 1.080, ADX = 24.666). Once the 1D RSI breaks the 70.000 overbought level again, it will be the most optimal sell entry on a seven month basis (previous one on October 21st 2022). It is already a strong sell opportunity and we are taking a long term sell position, targeting the bottom of the Channel Up (TP = 142.000). Prior idea: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
Short
by InvestingScope
4
USD JPY - FUNDAMENTAL ANALYSISForeign exchange analysts at Goldman Sachs still expect that the US Dollar to lose ground over 2023 as a whole, but expect this will take longer than expected previously due to US and global developments. It notes; “Our underlying view for FX markets this year is that we are likely to see only a “bumpy deceleration” for the Dollar, because slack in the US economy is still limited, and we are still “waiting for a challenger.” The 3-month Dollar to Yen (USD/JPY) exchange rate has been revised higher to 140 from 132 previously while the 6-month forecast has been revised to 135 from 125. The 12-month forecast remains at 125.0. From a longer-term perspective, Goldman still expects that the dollar will lose ground, but it considers that the short-term perspective has changed slightly. It adds; “we think the recent rally in the broad Dollar more appropriately reflects the fine balance facing currency markets at the moment.” Goldman points out that the US economy has performed more strongly than expected after the Silicon Valley Bank collapse in March. According to Goldman; “In the US, recent data on credit conditions have been a bit better than feared. And cost pressures have eased somewhat but remain a top priority, so that a number of Fed officials have said they still see some risk that rates may ultimately have to rise further.” Another key element for exchange rates is that dollar selling necessitates the buying of another currency. In this context, Goldman is less confident that there are attractive alternatives. The narrative earlier in the year was of a strong rebound in China and notable resilience in the Euro-Zone. Both these elements have come into doubt over the next few weeks. The Bank of Japan has also not engaged in any shift in monetary policy with the ceiling for the 10-year yield held at 0.5%. The delay in tightening policy has undermined the yen in global markets. Goldman adds; “Dollar depreciation usually coincides with strong activity in the rest of the world, not US underperformance. We think recent developments all support this view, and should also support some further Dollar strength over the near term.” The 3,6 and 12-month Euro to Dollar (EUR/USD) exchange rate forecasts are unchanged at 1.05,1.05 and 1.10 respectively.
Short
by thunderpips
HelenP. I Japanese Yen may exit wedge and to declineHi folks today I'm prepared for you JAPANESE YEN analytics. Last month, Japanese Yen dropped to the level of 129.65 and after the test started to move in an uptrend. Subsequently, the price reached the level of 137.75, from which it started to decline and made a deep correction. After retesting the trendline, the Japanese Yen continued the uptrend and broke through the resistance at level 137.75. Over a long period, the price has formed an ascending wedge, inside which it is now traded. The Japanese Yen reached resistance of wedge and formed a resistance zone of 138.55-138.95. Recently, the price retested the resistance of wedge and resistance zone and start to decline. It seems to me that the price may leave the ascending wedge and go down. The Japanese Yen could drop and break through support, so goals will be set at levels 137.75 and 137.75. If you like my analytics you may support me with your like/comment ❤️
Short
by FirstNameHelen
1
USDJPY broke above a 6-month Resistance level.The USDJPY pair gave us the buy entry we wanted last time (see chart below) almost 2 months ago and we took a successful trade: Right now it is above the 138.210 level, a Resistance that was in effect since December 01 2022. This is a short-term bullish break-out call, so we turn bullish again targeting Resistance Zone 1 at 142.000, which also happens to be the top of the 6-month Channel Up. After this leg is completed, we will short at least as low as the 1D MA50 (blue trend-line), targeting an internal Higher Lows trend-line at 137.000. On the other hand, if the price breaks below that Higher Lows line first, we will sell the break-out and target the bottom of the Channel Up at 132.000. If selling escalates further and we the pair closes a 1D candle below the Channel Up, we will take a new sell targeting the January 05 2021 Higher Lows trend-line at 126.000. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
Long
by TradingShot
6
USD JPY - FUNDAMENTAL ANALYSISThe US dollar has hit a fresh year to date high overnight against the yen at 138.87 as it continues to extend its advance from the low of 133.75 recorded on 11th May. Over that period the yen has been the worst performing G10 currency alongside the Scandi currencies of the Swedish krona and Norwegian krone which have declined by over 2% against the US dollar. The recent move higher in USD/JPY has coincided with the ongoing adjustment higher in US rates. 2-year and 10-year US government bond yields have closed higher for seven consecutive days which is the longest run of higher closing prices since September of last year. It was also a period of yen weakness when USD/JPY was breaking above the 140.00-level for the first time since the middle of 1998. According to the latest CFTC report, leveraged funds have been paring back the size of their short yen positions this month although they still remain close to levels from back in autumn of last year when USD/JPY hit its current cycle high. The BoJ’s ongoing reluctance to tighten monetary policy further in the near-term combined with recent adjustment higher in US rates has triggered renewed upward momentum for USD/JPY. The move higher in US rates was encouraged yesterday by reassuring comments following a meeting between President Biden and House speaker McCarthy on the debt ceiling. After the talks, House speaker McCarthy stated that “the tone was better than any other time we have had discussions”. Both President Biden and House leader McCarthy acknowledged that the talks had been productive although they have not yet reached an agreement. President Biden stated that “we reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement”. House leader McCarthy expects to speak with President Biden on a daily basis until a deal has been reached. The developments support market expectations that a compromise agreement will be reached to raise the debt ceiling before the so-called “X-date”. If those expectations are seriously challenged in the coming weeks then it could trigger a squeeze of short yen positions and a sharp move lower in USD/JPY. At the same time, the move higher in US rates was encouraged yesterday by comments from Fed officials. St Louis Fed President Bullard stated that he is “thinking two more moves this year” to put enough downward pressure on inflation. He is a wellknown hawk and a non-voter on the FOMC this year. The hawkish comments from St Louis Fed President Bullard were partially offset by relatively more cautious comments from Minneapolis Fed President Kashkari who stated “we may have to go higher from here, but we may not raise rates quite as aggressively and as quickly as we have over the course of the past year”. He also believes it’s a close call as to whether the Fed raises rates further in June or skips that meeting. We would place more weight on his comments as he is a voter on the FOMC this year. June rate hike expectations have since edged higher again with the US rate market pricing in around 5bps of hikes.
Short
by thunderpips
2
USDJPY trades in 5th impulse wave and can continue to rise Hello traders, I want share with you my opinion about Japanese Yen. Watching the chart, we can see how the price has been moving up for some time. Reaching the level 137.75, the Japanese Yen made a deep correction to form the buyer zone, and continued to grow after a retest. Over time, the price formed the Elliott waves and continues to move up already for some time. The Japanese Yen broke through the level 135.65 (1st wave) and, after a small correction (2nd wave) retest of the current support level, and continued to rise. Not so long ago, the Japanese Yen, forming the 3rd wave of upward impulse, broke through the resistance area 137.50-137.80 and continued to grow. Now the price has made a small correction (4th wave) has decreased and after retesting the current support area, and continued to rise. The price is currently trading above the support area and can continue to rise. I think the Japanese Yen can form a 5th impulse wave and continue upward move. In that case, I decided to set the targets at level 138.75 and at level 140.00. Please share this idea with your friends and click Boost 🚀
Long
by LegionQ8
1