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USD JPY - FUNDAMENTAL ANALYSISBNP Paribas 2023-2024 Exchange Rate Forecasts Capital Outflows will Undermine the Dollar A starting point for the BNP market analysis is that it considers the dollar is notably overvalued in global markets, especially against the yen. It adds; “The USD on a G10 trade-weighted index is trading almost 2 standard deviations (about 25%) rich relative to our estimates of its long-term fair value, as captured by the BNP Paribas FEER.” The debate surrounds whether there will be a trigger for the overvaluation to be reversed. BNP expects a significant shift in capital flows over the next few months which will have an important impact on currency rates. According to the bank; “The normalization of global yields should continue to encourage repatriation by Eurozone and Japanese investors, who are overweight US assets.” BNP also considers that unease over US equity valuations will encourage a flow of funds out of the US into the rest of the world It adds; “Coupled with FX-hedge ratios at low levels, we see space for significant USD selling. Overall, BNP places less emphasis on Federal Reserve rate cuts in forecasting that the dollar will lose ground. Yen Can Secure Capital Inflows BNP continues to expect a strong recovery for the yen. Firstly, it expects that the Bank of Japan will tighten policy in July which will tend to strengthen the currency, especially given scope for a repatriation of funds by domestic institutions. It also expects lower US yields will support the yen while the threat of intervention will tend to curb potential selling pressure on the currency. The dollar to yen (USD/JPY) exchange rate is not forecast to hold above the 140.00 level.
Short
by thunderpips
6
Bulls circle USD/JPY ahead of the FOMC meetingWhilst the US dollar has mostly retraced over the past couple of weeks against FX majors, it has held its own against then Yen. In fact, momentum is now turning higher after forming a triple bottom ~139 and breaking above a retracement line. The most traded price during the prior consolidation is 139.55, which could provide a level of support if prices retrace ahead of its next leg higher. Take note that overnight implied volatility has blown out ahead of the FOMC, so be prepared for some volatility before the next major move takes place.
Long
by CityIndex
USD JPY - FUNDAMENTAL ANALYSISBNP Paribas 2023-2024 Exchange Rate Forecasts Capital Outflows will Undermine the Dollar A starting point for the BNP market analysis is that it considers the dollar is notably overvalued in global markets, especially against the yen. It adds; “The USD on a G10 trade-weighted index is trading almost 2 standard deviations (about 25%) rich relative to our estimates of its long-term fair value, as captured by the BNP Paribas FEER.” The debate surrounds whether there will be a trigger for the overvaluation to be reversed. BNP expects a significant shift in capital flows over the next few months which will have an important impact on currency rates. According to the bank; “The normalization of global yields should continue to encourage repatriation by Eurozone and Japanese investors, who are overweight US assets.” BNP also considers that unease over US equity valuations will encourage a flow of funds out of the US into the rest of the world It adds; “Coupled with FX-hedge ratios at low levels, we see space for significant USD selling. Overall, BNP places less emphasis on Federal Reserve rate cuts in forecasting that the dollar will lose ground. Yen Can Secure Capital Inflows BNP continues to expect a strong recovery for the yen. Firstly, it expects that the Bank of Japan will tighten policy in July which will tend to strengthen the currency, especially given scope for a repatriation of funds by domestic institutions. It also expects lower US yields will support the yen while the threat of intervention will tend to curb potential selling pressure on the currency. The dollar to yen (USD/JPY) exchange rate is not forecast to hold above the 140.00 level.
Short
by thunderpips
3
🔥 MODIFICATION: NZDJPY 🔥 SWING TRADE 🔥Our technical analysis of NZDJPY is still in play. The pair has been in a downtrend for the past few months and has recently reached a Supply Zone (SZ) at 86.60 on the 15-hour chart. This SZ suggests that there is strong selling pressure at this level, and it is likely that the pair will continue to decline. The next resistance level is at 86.80, and if this level is respected, then we have a huge opportunity to capitalize on this downside pressure. Resistance @ 86.80 Supply Zone @ 86.60 SSO2 @ 86.15 📉 SSO1 @ 85.15 📉 TP1 @ 84.35 (shaving 25%) TP2 @ 83.66 (shaving 50%) TP3 @ 82.33 (closing ALL Sell Orders) BLO1 @ 82.00 BLO2 @ 81.25 -SL @ 80.85 🚫
Short
by ProfessorCEWard
1
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