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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
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
Bitcoin
Mixed
More View more
Real Time News
  • #GBP, #SEK and the #NOK are expected to be the most active G10 currencies vs USD with 1-week implied volatility at 9.35, 9.13 and 8.90, respectively
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am ET on DailyFX! https://t.co/RgnsklZ2Gl
  • The Australian and New Zealand Dollars trimmed their gains as optimism on the US-China “phase one” trade deal faded. NZD/USD is at risk to turning lower on signs of technical indecision $AUDUSD $NZDUSD #tradewars - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2019/12/16/Australian-Dollar-and-New-Zealand-Dollar-Outlook-as-Week-Begins.html?CHID=9&QPID=917702 https://t.co/SmVBWwojc3
  • - The Singapore Dollar (SGD) presents a unique undertaking for traders - It is guided by the MAS, which manages the exchange rate instead of short-term rates - Learn the principals of developing an SGD fundamental forecast to trade USD/SGD https://www.dailyfx.com/forex/fundamental/article/special_report/2019/09/03/The-Singapore-Dollar-and-MAS-What-is-SGD-and-How-to-Trade-it.html
  • #DidYouKnow a #Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/c51s3IBcEu https://t.co/eWM70sTfq3
  • Natural Gas trading is popular among traders due to its volatility. How can you trade this? Find out here: https://t.co/GSzSS9fn7Z https://t.co/bl0lp9NtkQ
  • #EURUSD pivot points (daily) – S3: 1.0991, S2: 1.1065, S1: 1.1093, R1: 1.1167, R2: 1.1214, R3: 1.1288- https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Hello there, traders! Themes for this week's webinar: - US-China #tradewar - #HongKongProstests: Carrie Lam's visit to Beijing - #UKElections2019 recap + outlook - Government shutdown in 2020? - Update on #RCEP - CRUCIAL rate decision this week⬇️ https://www.dailyfx.com/webinars/146770987
  • With increasing volatility in weather patterns, how might storms, hurricanes, and floods rattle the supply chain for petroleum-based products and impact crude oil prices? Get your market update from @ZabelinDimitri here:https://t.co/O4dgBl47fq https://t.co/eMb7iCfdqS
  • Join analyst @DavidJSong at 5:30 PM ET/10:30 PM GMT for your weekly update on key news trading events. Register here: https://t.co/gBlrRpCc55 https://t.co/1rVzPr6gx4
USD/JPY Retail FX Boosts Long Exposure; 118.20 in Focus Ahead of BoJ

USD/JPY Retail FX Boosts Long Exposure; 118.20 in Focus Ahead of BoJ

2015-04-03 22:04:00
David Song, Currency Strategist
Share:
USD/JPY Retail FX Boosts Long Exposure; 118.20 in Focus Ahead of BoJ

Fundamental Forecast for Japanese Yen: Neutral

The Bank of Japan (BoJ) interest rate decision may heighten the appeal of the Japanese Yen and spur a further decline in USD/JPY should Governor Haruhiko Kuroda continue to endorse a wait-and-see approach following the April 8 meeting.

It seems as though the BoJ will preserve its current policy stance throughout the first-half of 2015 in light of the recent rhetoric from Mr. Kuroda, and the central bank head may largely retain his pledge to achieve the 2% inflation target over the policy horizon especially as the committee sees the downward pressures from the sales-tax hike dissipating.

However, the BoJ appears to be under increased pressure to further embark on its easing cycle as Kozo Yamamoto, an advisor to Prime Minister Shinzo Abe, argues that ‘further monetary easing is absolutely essential’ to combat the downside risks surrounding the Japanese economy and insists that the central bank should offer additional monetary support at the April 30 meeting. As a result, a material shift in the forward-guidance for monetary policy may highlight a growing dissent within the central bank and dampen bets for a further decline in the exchange rate as its U.S. counterpart, the Federal Reserve, remains on course to normalize monetary policy in 2015.

Nevertheless, the bullish USD/JPY sentiment amongst retail FX traders appears to be picking up even as the dollar-yen struggles to hold above the 120.00 handle. The DailyFX Speculative Sentiment Index (SSI) shows long positions are 20.2% higher from the previous week; with 65% of the retail trader long USD/JPY. With that said, the crowded stance may continue to give way for a further decline in the exchange rate as the retail crowd goes against the near-term bearish momentum in the dollar-yen.

In turn, more of the same from the BoJ may generate a larger correction in USD/JPY and the pullback from 120.35 may open the door for a test of the March Low (118.32) into the 61.8% Fibonacci retracement (118.20) as the pair carves a series of lower-highs in March. At the same time, we will also keep a close eye on the monthly opening range going into the first full week of April as full market participation returns on Tuesday following the extended holiday weekend, and the recent wave of U.S. dollar weakness may continue to take shape next week as the dismal data prints dampens bets for a mid-2015 Fed rate hike.

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

DISCLOSURES

News & Analysis at your fingertips.