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
Bearish
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
GBP/USD
Bearish
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
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: France 40: -0.26% US 500: -0.33% Wall Street: -0.35% Germany 30: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/eDYtqwsUTc
  • Nebraska Department of Agriculture says China agriculture delegation cancels US farm visit to Nebraska according to RTRS #Tradewar $SPX
  • New Montana tourism campaign slogan: 'Visit Montana or the markets will drop. It's Time.' https://t.co/HemCbRKFIP
  • The MSCI #EmergingMarkets index down to session lows, covering the upside gap attained at Friday's market open as risk aversion engulfs financial markets in the wake of China's delegation team cancelling a farm trip to Montana. Will this bode ill for ongoing talks? #TradeWars https://t.co/AfeI8sL1mx
  • Anti-fiat #Gold prices at session highs as US government bond yields tumble following Chinese delegation team canceling farm trip in Montana #TradeWars https://t.co/byTaNE763d
  • 🇺🇸 (USD) Baker Hughes U.S. Rig Count (SEP 20), Actual: 868 Expected: 881 Previous: 886 https://www.dailyfx.com/calendar?utm_source=Twitter&utm_medium=TweetRobot&utm_campaign=twr
  • Big move on $SPX this afternoon on news that China trade officials have cancelled Montana visit https://t.co/rm6nZrFCbK
  • Sentiment deteriorating after Reuters report that the China delegation team cancels a visit to a farm in Montana, with officials set to return back to China sooner. #SP500, #AUDUSD, #NZDUSD and #USDJPY hitting session lows https://t.co/2du2JORtZ8
  • #Gold prices are in consolidation just below long-term trend resistance. Get your $gld technical analysis from @MBForex here:https://t.co/e0dOvLqpaY $XAUUSD https://t.co/Q7LFeIOWD2
  • RT @SkyNews: Brexit: Leaked document says UK proposal fails to solve backstop issues https://t.co/zpUcy0sDOI
USD/JPY Range Vulnerable as Yen Leans on 'Funding-Currency' Status

USD/JPY Range Vulnerable as Yen Leans on 'Funding-Currency' Status

2015-09-26 02:55:00
David Song, Currency Strategist
Share:
USD/JPY Range Vulnerable as Yen Leans on 'Funding-Currency' StatusUSD/JPY Range Vulnerable as Yen Leans on 'Funding-Currency' Status

Fundamental Forecast for Yen:Neutral

The long-term outlook for USD/JPY remains bullish amid the deviating paths for monetary policy, but the range-bound price action in the exchange rate may unravel in the days ahead as market participants continue to treat the Japanese Yen as a ‘funding-currency.’

Even though the Fed remains ‘data dependent,’ the recent rhetoric from Chair Janet Yellen suggest that the committee remains on course to raise the benchmark in 2015 as the central bank head pledges to normalize policy in a ‘timely fashion.’ As a result, the key data prints coming out next week may boost expectations for a rate-hike later this year as the economic docket is anticipated to show faster wage/price growth accompanied by another 200K expansion in U.S. Non-Farm Payrolls (NFP). Indeed, signs of a stronger recovery may encourage a larger dissent at the Fed’s October 28 interest rate decision especially as the region approaches full-employment.

In contrast, a down tick in Japan’s Tankan surveys may put increased pressure on the Bank of Japan (BoJ) to further embark on its easing cycle as it undermines the central bank’s scope to achieve the 2% target for inflation over the policy horizon. With the BoJ scheduled to announce two separate interest rate decisions in October, the softening outlook for global growth accompanied by the ongoing weakness in oil prices may become a growing concern for the central bank, and a greater willingness to boost the qualitative/quantitative easing (QQE) program is likely to produce headwinds for the Japanese Yen amid the deviating paths for monetary policy.

Moreover, market sentiment may continue to play a key role in dictating price ahead of the key interest rate decisions as global investors treat the Japanese Yen as a ‘funding-currency,’ and shifts in risk trends may largely accompany turns in USD/JPY as market participants weigh the outlook for monetary policy. Until then, the near-term consolidation in the dollar-yen may persist going into the end of September as the pair largely retains the opening range from the beginning of the month.

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

DISCLOSURES

News & Analysis at your fingertips.