JPY – USD/JPY price,charts,analysis
- The Bank of Japan will maintain ultra-accommodative monetary policy for the time being.
- Short-term interest rates remain unchanged at -0.1%, and the yield on 10-year bonds is around 0.0%.
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The Bank of Japan said today that consumer inflation is on an upward trend and monetary policy conditions may tighten in the coming months. The Bank of Japan lowered its forecast for core inflation to 2.4% from 2.8% in its quarterly outlook, but said:
“The consumer price inflation rate is likely to gradually increase toward the Bank of Japan's target as the output gap turns positive and medium- to long-term inflation expectations and wage increases increase.'' “The likelihood that this outlook will materialize continues to increase gradually,” it added. Although there is still a high degree of uncertainty regarding future developments,
According to the latest Bank of Japan interest rate probabilities, there is an almost 50-50 chance of raising interest rates at the central bank's meeting on April 26th.
The Bank of Japan may have added some support to the Japanese Yen, but the medium-term outlook for USD/JPY will depend on the USD and future data releases and events. The latest Core PCE report, released this Friday, will help drive price trends ahead of next week's FOMC meeting. The Fed is fully expected to keep interest rates on hold, but Powell's comments in his post-meeting press conference will need to be followed closely. Markets are hoping for some indication from Powell on when the central bank will begin its rate-cutting cycle, and comments on this will likely determine the direction of the dollar.
USD/JPY has turned down from last Friday's multi-week high of 148.80 and has tested 147.00 so far today. The pair continues to be supported by the three simple moving averages, and a break below 146.00 will pave the way for him to move below 145.00. The combination of a strong yen and a weak US dollar could ultimately lead to a drop to 140.00. There are still limits to upside, and it will take a better-than-expected US inflation announcement or a hawkish Chairman Powell next week for USD/JPY to return to 150 yen.
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USD/JPY daily chart
According to data from individual traders, 26.13% of traders are net long, with the ratio of traders short to long being 2.83:1. The number of traders who are net long increased by 7.17% from yesterday and decreased by 15.88% from last week. Net short by traders is up 2.86% from yesterday and 14.98% from last week.
While we typically take a contrarian view to crowd sentiment, the fact that traders are net short suggests that USD/JPY price may continue to rise.
|
change |
long |
shorts |
OI |
| every day | -13% | Four% | 0% |
| weekly | -26% | 12% | 0% |
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