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
Mixed
USD/JPY
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
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Mixed
More View more
Real Time News
  • - US Dollar may rise with havens vs. NOK and SEK on #coronavirus concerns - #FOMC outlook may push USD higher if officials re-iterate neutral position - BoE rate decision, forecasts could catalyze selloff in GBP/SEK, GBP/NOK https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/28/US-Dollar-May-Rise-vs-NOK-SEK-on-Coronavirus-Risks-and-FOMC.html
  • LIVE NOW! Senior Currency Strategist @IlyaSpivak discusses the technical and fundamental AUD/USD outlook for the week ahead here - https://www.dailyfx.com/webinars/378612179?CHID=9&QPID=917720
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.42%, while traders in US 500 are at opposite extremes with 67.96%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/afMbBXdsJc
  • LIVE IN 20 MIN: Senior Currency Strategist @IlyaSpivak discusses the technical and fundamental AUD/USD outlook for the week ahead here - https://www.dailyfx.com/webinars/378612179?CHID=9&QPID=917720
  • The $NZD is inching toward support guiding gains in the fourth quarter of 2019. A break may set the stage for long-term bearish trend resumption. Get your market update from @IlyaSpivak here:https://t.co/bnlx4RJ8oV https://t.co/guhzUtlNXP
  • Japan's Government Nominates Seiji Adachi for the Bank of Japan Board -BBG #BoJ
  • Join @IlyaSpivak 's #webinar at 10:00 PM ET/3:00 AM GMT to prepare for the week ahead in trading #AUDUSD Register here: https://t.co/sZNWPVRHA0 https://t.co/ToPfp6pCKf
  • The $USD may rise with USD/IDR, USD/SGD, USD/PHP and USD/MYR as #coronavirus contagion fears hurt emerging markets. The Fed and its repo operations will be closely watched. Get your market update from @ddubrovskyFX here: https://t.co/rPnwmsMlPn https://t.co/1zD4dRlcmK
  • My majors-based #JPY index (average #Yen value vs #USD, #AUD, #GBP and #EUR) continues its upside breakout through falling resistance from September. Early 2020 highs stand in the way as the key upper psychological barrier which if taken out, may spell medium-term Yen gains https://t.co/RXYREqI5wz
  • 🇦🇺 AUD NAB Business Confidence (DEC), Actual: -2 Expected: N/A Previous: 0 https://www.dailyfx.com/economic-calendar#2020-01-28
Volatility Near-Guaranteed on Critical Week for the USD/JPY

Volatility Near-Guaranteed on Critical Week for the USD/JPY

2015-10-23 22:03:00
David Rodriguez, Head of Product
Share:
Volatility Near-Guaranteed on Critical Week for the USD/JPYVolatility Near-Guaranteed on Critical Week for the USD/JPY

Fundamental Forecast for Yen:Bearish

The Japanese Yen fell for six consecutive trading days and finished the week at multi-month lows versus the resurgent US Dollar, and a big week ahead promises big moves for the USD/JPY and other Yen pairs.

Momentum clearly favors continued US Dollar strength versus the Yen. Yet upcoming policy announcements from the Bank of Japan (BoJ) and the US Federal Open Market Committee (FOMC) will likely drive USD/JPY direction through the foreseeable future.

Indeed, central banks continued to dominate FX market headlines through the past week of trade as a surprisingly dovish European Central Bank (ECB) and unexpected policy easing from the People’s Bank of China (PBoC) sparked major volatility across the board. Traders initially sent the US Dollar sharply higher versus the Euro on commentary from the ECB. A simultaneous surge in global equity markets helped send the highly-correlated USD/JPY exchange rate near fresh peaks, while the unanticipated PBoC action had a similar effect on both equities and the Yen. The US S&P 500 is thus far at its largest single-month gain in five years, and a strong link between stocks and the JPY suggests that the uptrend in equities makes further USD/JPY gains likely.

The Bank of Japan is widely expected to announce fresh monetary policy easing in the week ahead, while interest rate traders are actually pricing in a (very minor) chance that the US FOMC may actually raise interest rates at their October, 28 meeting. The stark contrast in expectations for the BoJ and US central bank help explain the fact that the US Dollar trades just three percent off of 9-year highs versus the Yen.

Of course expectations can quite easily beget disappointment, and risks for the USD/JPY ahead of both the BoJ and Fed decisions seem weighed to the downside. Traders should keep an eye on Japanese Consumer Price Index inflation figures due the day before the Bank of Japan decision as any surprises could easily reshape the odds of fresh monetary policy action. There is comparatively little data to shift sentiment ahead of the Fed, but traders should use caution ahead of what promises to be a big week for the USD/JPY.

FX options traders have sent USD/JPY 1-week volatility prices to their highest levels since the US FOMC’s highly-anticipated September meeting. It will be critical to watch how markets react to both the Japanese and US central bank policy announcements.

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

DISCLOSURES

News & Analysis at your fingertips.