We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here:https://t.co/Fkzk88Y5gm https://t.co/beKjEODs2y
  • RT @RichDvorakFX: @Investingcom Seems to me like investors ‘high’ on central bank liquidity are fiending for more and staring down the edge…
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkd4B0k https://t.co/b8RNJQKE1m
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/yXomAftdv8 https://t.co/wOQAHZVnxB
  • Forex trading, which is the act of exchanging fiat currencies, is thought to be centuries old – dating back to the Babylonian period. Learn about the history of Forex here:https://t.co/ePTJlbUP7c https://t.co/WS2LkCt9gX
  • Two major events will dominate #Euro trading in the coming week: an #ECB meeting on Eurozone monetary policy, followed by an #EU summit to reach agreement on a recovery fund. Get your #currencies update from @MartinSEssex here: https://t.co/wnXjTDizMv https://t.co/tmxDfkgmSv
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/UQRaKusFP7
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here:https://t.co/vg7w10la3j https://t.co/nUvvI3WQpx
  • Australian Dollar is up fractionally this week with Aussie stalling just below the yearly range highs. Here are the levels that matter on the $AUDUSD technical chart. Get your #currencies update from @MBForex here: https://t.co/jYzBK1qH4s https://t.co/gYj4tFbsGS
  • What is the road ahead for equities this coming week? Check out my fundamental outlook below! #DowJones #SP500 #DAX30 #FTSE100 https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2020/07/11/Dow-Jones-SP-500-DAX-30-FTSE-100-Outlook-Stocks-Week-Ahead.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/HjIBDKqwvO
Massively Important Week for Yen as BoJ Meets with Kuroda at Helm

Massively Important Week for Yen as BoJ Meets with Kuroda at Helm

2013-03-29 23:11:00
Christopher Vecchio, CFA, Senior Strategist
Share:
Massively_Important_Week_for_Yen_as_BoJ_Meets_with_Kuroda_at_Helm_body_Picture_1.png, Massively Important Week for Yen as BoJ Meets with Kuroda at Helm

Massively Important Week for Yen as BoJ Meets with Kuroda at Helm

Fundamental Forecast for Japanese Yen: Neutral

The Japanese Yen was a top performer this week, surging by over +1.60% against the Euro, while adding a mere +0.30% against the US Dollar. The flight to safety was certainly a theme this past week, as poor handling of the Euro-zone crisis by policy officials resulting from the controversial Cypriot bailout kept tensions over the Euro-zone sovereign debt crisis at a relatively high level. The official at fault for stoking rising volatility in Europe – not just for the Euro, but for the other European currencies, Italian and Spanish bonds, and equity indexes across the continent – Eurogroup President Jeroen Dijsselbloem may have strong intentions and long-term positive intentions with his rhetoric, but the near-term implications of using Cyprus as a “template” for the region’s financial crisis has soured investors’ appetite for risk.

Register HERE to take this short quiz assessing your FX trading knowledge and receive a learning curriculum based on your responses.

While the Yen has benefited from the renewed drive to safety, there are certainly domestic concerns that are persisting that are preventing a true turnaround in the worst performing currency of 2013. In contrast to the Euro-zone debt crisis rearrising, which is a bullish accelerant for the Yen, the Bank of Japan under the watchful eyes of Haruhiko Kuroda convenses this week, which is the single most bearish catalyst facing the Yen at present time. The balance of these two issues leads us to a neutral outlook for the week ahead.

Ahead of the meeting during the first week of April, traders have clearly tempered their enthusiasm about selling the Yen in droves, as they had been from mid-November to early-March: from November 14, the day that the Japanese elections in December were announced and it became clear that Shinzo Abe would become prime minister, to March 11, the day the USDJPY peaked, the Yen shed -22.90% against the Euro, and -19.98% against the US Dollar; since March 11, the EURJPY has fallen by -3.83% and the USDJPY has dropped by -2.14%. Making the Yen’s rebound even more curious – withstanding the much-needed technical relief – was that Mr. Kuroda took the reigns of the BoJ from Masaaki Shirakawa on March 19. The Yen has gained against all of the majors but for the New Zealand Dollar since the arch-dove himself rose to power.

While there is no doubt that Mr. Kuroda will step up the BoJ’s dovish rhetoric and policy actions in the coming months, there is a slight impediment persisting from now until April 8 that has prevented any new policy action thus far: the technicality of Masaaki Shirakawa resigning early on March 19 (Kuroda needs to finish Shirakawa's term). Hence, when considering Kuroda's likelihood path of easing, he's going to implement policies that aren't too controversial, as he does need to be reelected after April 8. If he sets forth policies that are too dovish, he and his deputy governors could lose favor quickly among the main opposition DPJ, especially Kikuo Iwata, who was nearly voted down.

Nevertheless, earlier this week, Governor Kuroda made clear that two things will happen in his tenure: the BoJ will hit its inflation target of +2.0% y/y within two years; and resulting from the increased inflation target, increased asset purchases, likely including Japanse Government Bonds (JGBs). In this interim period before April 8, we should expect Kuroda's BoJ to first increase its monetary easing program. If increased asset purchases don't stoke medium-term inflation (they won't), Kuroda's BoJ will wait until after the next round of confirmations before accelerating the Shirakawa-mandated open easing timeline from January 2014 to midyear 2013. It is likely that any announcement this week could disappoint even the most earnest of Yen bears. As such, our forecast is neutral, as the BoJ policy meeting could present a bearish influence for the first half of the week, while exhaustion following the event and the return of the Euro-zone crisis could present a bullish influence. –CV

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.