JPY Plunges Lower Still
The Japanese Yen has fallen to it slowest level against the Dollar since 2002 on the back of the April BOJ meeting today. The BOJ reaffirmed its commitment to maintaining an easing presence in the market, stating that it will continue buying bonds daily in line with its aim of keeping bond yields at zero.
The latest announcement from the BOJ comes despite the growing wave of central bank tightening and despite the JPY having collapsed in recent months. While the BOJ fears that the domestic economy is too fragile to withstand tightening, critics worry that the country will not recover from the inflationary impact of JPY depreciating so heavily.
Looking ahead, the BOJ warned that the outlook in Japan is subject to downside risks as a result of the ongoing conflict in Ukraine which is driving commodities prices higher. With regard to inflation, the BOJ noted that risks are skewed to “the upside for the time being, mainly reflecting uncertainties over energy prices… but are generally balanced thereafter”.
Technical Views
USDJPY
Looking at USDJPY on the monthly chart clearly shows the scale of the recent moves and the key levels we’ve broken through. With both MACD and RSI firmly bullish, the focus is on a continuation higher with the all-time-highs at 146.97 the main target. Indeed, the 100% fib extension target of the bullish leg from 2011-2015 completes just above that level also. In the near term, 134.39 is the next resistance for bulls to contend with while 128.50 is first support.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.