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Why is the GBP/JPY an important market? The currency pairing of the British pound / Japanese yen (GBP/JPY) is one of the most traded pairs in the foreign exchange market, representing a significant quantity of daily trading. It's a pairing which is popular amongst veteran traders and newcomers alike. GBP/JPY trading hours The forex market is available 24 hours a day, but UK trading, in particular, tends to get active from 8:00 AM and taper off from 5:00 PM. Of course, there will be times during the day when this currency pair experiences higher volumes - typically around major market announcements. In the following sections, we're going to take a look at the history of the pound and Japanese yen, what factors can influence its movements over time, and why exactly sterling to yen (GBP/JPY) trading remains so popular. History of GBP/JPY To begin our overview of the pound and the Japanese yen we're going to explore the history behind both of these currencies. The pound sterling dates all the way back to around 775. It evolved into its current, modern form following decimalisation in 1971. Currently, it is the fourth most-traded currency across the foreign exchange market and represents a significant amount of daily trades all around the world. The yen was officially adopted in 1871 by the Meiji government, and as such has a more complex and rich history in comparison to some of the relatively newer currencies around the world. Since inception, the value of the yen has grown considerably and this is, in large part, due to the strong Japanese industrial complex. A thriving industry consisting of technological developments, agricultural innovation, and a range of exportable products have all historically helped the yen. Japanese yen (JPY) carry trade The yen carry trade is a phenomenon that occurs when investors borrow yen at a low-interest rate then purchase foreign currency that pays a relatively high interest rate on its bonds. A yen carry trade example would involve borrowing yen and converting it into US dollars in order to profit from US Government bonds. The carry trade is maintained by the famously low Japanese interest rate. Factors influencing the GBP/JPY Role of GBP A significant factor which affects the value of GBP is the overall performance of the economy across the United Kingdom. There are three gross domestic product (GDP) reports which are released, as follows; Preliminary GDP, Revised GDP, and Final GDP. Traders and investors will follow these reports when trying to determine the future movement in the market. The price of the pound sterling is also impacted by monetary policies enacted by the Bank of England (BOE). Whenever the BOE deem inflation to be rising too quickly they will utilise monetary policy tools to try to control the rise. During these procedures, interest rates can rise, which is another factor that traders consider when analysing the market and possible future direction for the GBP-JPY pairing. Role of JPY The Bank of Japan (BOJ) and other financial institutions release regular reports regarding interest rates and other economic data, which traders look towards when trying to determine future price movements. These figures are especially useful for figuring out possible movements in the GBP/JPY exchange rate. As Japan is such a small country – in comparison to other big players in the foreign exchange market – events such as national and natural disasters can also play a part in affecting (or destabilising) the currency and its rates. BRITISH POUND TALKING POINTS: GBP/USD is staging a recovery after sliding to fresh two-year-lows last Thursday. GBP/JPY has found resistance on a descending trendline as looked at yesterday and, so far, support has held around the 165.00 psychological level, keeping the door open for bullish breakout potential. GBP/JPY Longer-term, there’s some remaining bearish potential in here but it appears that we’re at least a few steps away before that theme develops. And I’ll start off with the weekly chart, to really illustrate what we’re dealing with. The below weekly chart shows extreme indecision over the past few months. In April, prices broke above the 160 psychological level and matters haven’t really been the same since. On an even shorter-term basis, GBP/JPY is being constrained by a trendline. This trendline is taken from tops in early and mid-June and, so far, has helped to hold the highs. I wrote about this yesterday, highlighting support in the 164.47-165.00 area. That has since held and the door remains open for bullish potential in the pair, with a breach of 166.10 opening the door for a move up to 166.85. And, after that, the double top is exposed around 168.06.
Short
by DaveBrascoFX
3
USD/JPY hits fresh multi-year high, holds above 119.00 USD/JPY hits fresh multi-year high, holds above 119.00 amid resurgent USD demand FUNDAMENTAL: 1 USD/JPY caught fresh bids on Friday after the BoJ stuck to its accommodative policy stance. A goodish pickup in the USD demand provided an additional boost and remained supportive. A softer risk tone could benefit the safe-haven JPY and cap gains amid overbought conditions. The USD/JPY pair extended its steady intraday ascent through the mid-European session and climbed to a fresh multi-year peak, around the 119.10-119.15 region in the last hour. A combination of supporting factors assisted the USD/JPY pair to regain positive traction on the last day of the week and prolong its recent bullish trajectory witnessed over the past two weeks or so. The Bank of Japan stuck to its dovish stance and left its ultra-easy policy setting unchanged at the end of the March meeting. This, in turn, weighed on the Japanese yen and pushed the pair higher amid a goodish pickup in the US dollar demand. The greenback made a solid comeback on Friday and reversed the previous day's slide to the one-week low, bolstered by the start of the policy tightening cycle by the Fed. It is worth recalling that the US central bank hike its target fund rate by 25 bps on Wednesday and indicated that it could raise interest rates at all the six remaining meetings in 2022. This, along with elevated US Treasury bond yields, underpinned the greenback. The latest leg up now seems to have confirmed a near-term bullish breakout and might have already set the stage for a further near-term appreciating move for the USD/JPY pair. The divergence in the BoJ-Fed monetary policy outlook adds credence to the constructive outlook. That said, extremely overbought conditions on the daily chart could hold back traders from placing aggressive bullish bets, at least for the time being. Moreover, a weaker risk tone, which tends to benefit the safe-haven Japanese yen, might further contribute to capping the USD/JPY pair. The lack of progress in the Russia-Ukraine peace negotiations tempered investors' appetite for riskier assets and led to a fresh leg down in the equity markets. Traders might also prefer to wait on the sidelines ahead of a meeting between US President Joe Biden and his Chinese counterpart Xi Jinping. Nevertheless, the bias seems tilted firmly in favour of bullish traders, though the technical set-up makes it prudent to wait for some near-term consolidation or a modest pullback before the next leg up. Nevertheless, the USD/JPY pair seems all set to settle near the highest level since February 2016 and record strong gains for the second successive week. 2 Holding 118.595 Puts USD/JPY in Position to Resume Uptrend The Dollar/Yen is edging higher on Friday after consolidating for nearly two sessions despite the Federal Open Market Committee (FOMC) on Wednesday signaling the equivalent of a quarter-point increase at each of its six remaining policy meetings this year, leaving investors racing to work out how much monetary tightening the economy can handle. The USD/JPY picked up some support overnight after Bank of Japan (BOJ) policymakers voted to maintain ultra-accommodative monetary settings. This move widened the policy gap with the Fed, which helped make the U.S. Dollar a more attractive asset. The main trend is up according to the daily swing chart. A trade through 119.118 will signal a resumption of the uptrend. A move through 114.651 will change the main trend to down. A change in trend to down at this time is highly unlikely, but the Forex pair is currently inside the window of time for a closing price reversal top. If confirmed, this could trigger the start of a minimum 2-3 day correction. The USD/JPY is currently straddling a pair of former tops at 118.601 and 118.658. They could become new support following the “old top, new bottom” rule. The nearest support level is a minor pivot at 116.765. Short-Term Outlook The direction of the USD/JPY on Friday is likely to be determined by trader reaction to 118.595. Bullish Scenario A sustained move over 118.595 will indicate the presence of buyers. Taking out 119.118 will indicate the buying is getting stronger. The daily chart indicates there is plenty of room to the upside with no resistance coming in until the January 29, 2016 main top at 121.678. Bearish Scenario A sustained move under 118.595 will signal the presence of sellers. A failure to hold 118.176 will break the chart pattern. This could trigger the start of a pullback with the pivot at 116.765 the next potential downside target. Side Notes Taking out 119.118 then closing below 118.595 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a minimum 2 to 3 day correction with 116.765 the first downside target. If Breaking 121 upward UDJPY can reach 125 and then 130-135! Strategy on low time frame: Go with the TREND!POSITION SIZE ONLYIF THE PRIOR POSITION STOP IS IN PROFIT(TRAILING TOPTURNS TO TAKE PROFIT LEVEL) BUYING PULL BACK RED BARS
Long
by DaveBrascoFX
1
USD JPY - FUNDAMENTAL ANALYSISJapanese yen strength over time. While the yen underperformed during the global monetary tightening phase, in our view, the currency has scope to outperform later this year. We now believe the BoJ will take advantage of a tactical opportunity to further tweak its policy settings in Q4-2023 to further normalize the government bond market. Such a policy move adds to our constructive medium-term outlook for the yen. Yen outperformance over time should also be supported by the end of central bank tightening and a transition toward easing, as well as a U.S. recession in the second half of 2023.
Short
by thunderpips
EURJPY Waiting for a LongThe ECB raises interest rates and what does the euro do? It drops drastically, especially against the EURJPY exchange rate, as we have the yen as the second safe haven currency after the CHF. My objective is to wait for the price to reach the 146.50 zone where there is an excellent demand zone. The area was identified through the 3H + 45M strategy. We will see if the market meets expectations. The objective is Long with a target of 150. Let me know your thoughts. Good trading to everyone. Forex48 Trading Academy
Long
by Forex48_TradingAcademy
USD/JPY -3/5/2023-• FED-BOJ divergence is on the highlight again with the Bank of Japan status-quo last week, maintaining easing policy for the time being and in the near future, disappointing bulls who were betting on a tightening policy later this year • US Dollar strength comes from an aggressive Fed's policy which is likely to persist for some time • Technically, picture is bullish while prices are trading inside an ascending channel supporting higher prices in the coming days and weeks • Daily high around 137.70 was a previous resistance level and as the history tend to repeat itself, it again acted as a selling opportunity with price trading now almost 100 pips below it • Since we are approaching the higher extreme of the channel, risk reward favors to be on the short side hoping for a move back to the lower extreme Traders, if you like this idea please comment and like ✅ Here to answer all your questions, Good luck
by RamziAbouAbdallah-CMT
MarketBreakdown | EURUSD, USDJPY, Dollar Index, USDCHF Here are the updates & outlook for multiple instruments in my watchlist. 1️⃣ EURUSD daily time frame 🇪🇺🇺🇸 The pair broke and closed below an important rising trend line, it makes me think that the market may go lower before the FOMC. 2️⃣ USDJPY daily time frame 🇺🇸🇯🇵 The market reached a key horizontal structure resistance. Taking into consideration the fact that the market is quite overbought, we might see a pullback from that structure. Alternatively, its bullish breakout may initiate a strong bullish wave. 3️⃣ Dollar Index (DXY) daily time frame 💲 The Index formed a cup and handle pattern and currently testing the neckline. A bullish breakout of that and a daily candle close above will confirm a bullish reversal. 4️⃣ USDCHF daily time frame 🇺🇸🇨🇭 The pair broke a solid falling trend line and heading towards a key horizontal resistance, forming a huge double bottom on a daily. A bullish breakout of its neckline will initiate a bullish reversal. Do you agree with my market breakdown? ❤️Please, support my work with like, thank you!❤️
Short
by VasilyTrader
7
USD JPY - FUNDAMENTAL DRIVERSJapanese yen strength over time. While the yen underperformed during the global monetary tightening phase, in our view, the currency has scope to outperform later this year. We now believe the BoJ will take advantage of a tactical opportunity to further tweak its policy settings in Q4-2023 to further normalize the government bond market. Such a policy move adds to our constructive medium-term outlook for the yen. Yen outperformance over time should also be supported by the end of central bank tightening and a transition toward easing, as well as a U.S. recession in the second half of 2023.
Short
by thunderpips
3
Looking to buy USDJPYOur trade relies on fundamental analysis, and technical analysis only serves as our entry point. Currently, the US is undergoing a process of quantitative tightening. The upcoming FOMC meeting is expected to result in a 25 basis point rate increase. A rate increase of 50 basis points or continued rate hikes would be seen as a hawkish signal. Meanwhile, Japan is maintaining its monetary easing policy, and the new BOJ governor, Ueda, announced in a recent speech that they plan to slowly continue their yield curve control to support a healthy economy. This has led us to take a long-term dovish stance on the JPY. Shifting our focus to the technical analysis, We are currently awaiting a retracement to the 61% Fibonacci level. However, we should remain vigilant as there is a possibility that the price may reject the 134.78 level. We are also waiting to retest the trend line and the demand zone.
Long
by keechi
🔥 REVENGE TRADE: CHFJPY ✨ SHORT TERM LONG 🔥TP @ 155.00 BLO @ 151.53 ADDITIONAL INFO: 00:00 Revenge Trading 01:12 Buy Order (aggressive) 02:04 Small Loss for a Big Win 02:48 I hate CHFJPY!!! Unfortunately, our previous short position was liquidated because I based my analysis on the Oanda, which had limited historical data for this pair. As a result of examining the FXCM chart, I've determined that there is more upside potential, so here is my revised assessment.
Long
by ProfessorCEWard
🔥 NEW: CHFJPY ✨ BIG PICTURE SHORT 🔥-SL @ 158.45 🚫 SLO2 @ 157.33 ⏳ SLO1 @ 155.25 ⏳ TP1 @ 151.25 (shaving 25%) TP2 @ 148.50 (shaving 25%) TP3 @ 145.33 (shaving 25%) TP4 @ 143.00 (shaving 25%) TP5 @ 138.50 (closing ALL Sell Orders) BLO @ 137.90 (15H) ⏳👈🏾 ADDITIONAL INFO: Unfortunately, our previous short position was "stopped out" because I based my analysis on my Oanda chart, which had limited historical data for this pair (not sure why). As a result of examining an FXCM chart (not my broker), I've determined that there is more upside potential, so here is my revised assessment.
Short
by ProfessorCEWard
9
USD JPY - FUNDAMENTAL DRIVERSThe dollar is expected to fall and the yen rise. Risk aversion prevailed in March on credit concerns about US regional banks and a major European bank, with the dollar/yen pair trading with a heavy topside to drop below 130 yen. Excessive concerns about the US financial system then eased on news that some regional banks would be bought out, so the dollar was bought again. However, the pair’s rally was quite muted compared to its rally towards 135 yen after the release of the US February consumer price index (CPI) data. With President Biden also saying the banking crisis was still not over, it seems this rally was merely due to a slight withdrawal of ‘excessive concerns,’ with investors still worried that tougher banking regulations might act as a new risk-off factor. Furthermore, though FRB chair Jerome Powell has said he envisages one more rate hike this year, the markets are split evenly when it comes to pricing in another hike, so it seems there are concerns about the negative impact of tightening on the financial environment. The Bank of Japan (BOJ) will also be meeting to set policy for the first time under its new structure at the end of April. Most observers believe the BOJ will stick to the status quo for now, but it is also possible the BOJ might announce a policy shift. Investors are starting to focus on FRB rate hikes, so if a BOJ policy shift does seem more likely, market participants will then focus on a future shrinkage of Japanese/US interest-rate differentials. Based on the above, it seems the dollar/yen pair will be susceptible to more downward pressure in April. However, the US also released some firm economic indicators in March. Inflationary pressures also remain high, as evinced by a comment by a FRB official that “inflation is still too high.” US interest rates rose and the dollar was bought at the start of March on hawkish comments by FRB chair Jerome Powell. Controlling inflation remains the FRB’s number one priority. With Mr. Powell also commenting that “the ultimate level of interest rates is likely to be higher than previously anticipated,” some observers believe it is too early to start talking about rate cuts. With concerns about the financial system smoldering away, market participants will be focusing on comments by FRB officials ahead of the May FOMC meeting as they try to gauge the direction of monetary policy.
Short
by thunderpips