News & Analysis at your fingertips.

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
Mixed
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
Bearish
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
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
More View more
Real Time News
  • All eleven S&P 500 sectors ended deeply in the red, with energy (-4.55%), information technology (-3.21%), materials (-2.93%) and real estate (-2.91%) among the worst performers. A whopping 94.7% of the S&P 500 components closed lower. https://t.co/kqP3xPZBJf
  • Rising demand for safety boosted the US Dollar, which climbed for a third day to 94.43 - a two-month high. Strong USD dampened precious metal prices, and put pressure on risk-linked currencies namely AUD, NZD and NOK. https://t.co/ijthZpUdTn
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.57%, while traders in EUR/GBP are at opposite extremes with 63.44%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/zn9sbgM386
  • While @IG_US Client Sentiment is offering a mixed outlook for the S&P 500 and #Dow Jones, these could be at risk to a turn lower based on multiple bearish technical warning signs. Get your market update from @ddubrovskyFX here:https://t.co/9kYnq6hH1f https://t.co/YIvXZ76eH1
  • #NOK, #AUD and #NZD are expected to be the most-active #G10 majors versus #USD with one-week implied volatility at 16.33, 12.22 and 12 respectively [delayed] -BBG
  • $DJIA futures carving out a Falling Wedge pattern just above the 200-MA after falling over 8% from the September 3 post-crisis high. $DJI #DowJones Is a recovery in the works? Find out how to trade these patterns and more here: https://www.dailyfx.com/education/technical-analysis-chart-patterns/falling-wedge.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr https://t.co/7dfYFgkpub
  • Copper prices may continue to push higher despite a worrying surge in Covid-19 cases and the lack of progress in Congressional stimulus negotiations. Get your #copper market update from @DanielGMoss here:https://t.co/N2OW566nID https://t.co/C33TkPT1vN
  • After some divergence, #EmergingMarkets capital outflows are picking up alongside the selloff in the #SP500 Markets may now be increasingly opening up to the consequences of a slowdown in the US spilling outward given a lack of new fiscal stimulus there - https://t.co/gKEdg1GeeZ https://t.co/I5dAptPjyQ
  • #SP500 futures hurtling towards the 200-MA after breaching Bear Flag support Above-average volume in tandem with the RSI snapping below 40 hints at extension of the recent move Implied measured move suggests price could fall as far as the 3000 level. #ES #SPX https://t.co/VdZKgblp3S https://t.co/hXHOIS1oho
  • Wall Street Futures Update: Dow Jones (-0.266%) S&P 500 (-0.317%) Nasdaq 100 (-0.524%) [delayed] -BBG
Has there ever Been a More Critical 12 Hours for the USD/JPY?

Has there ever Been a More Critical 12 Hours for the USD/JPY?

2016-09-18 22:50:00
David Rodriguez, Head of Product
Share:
Has there ever Been a More Critical 12 Hours for the USD/JPY?

Has there ever Been a More Critical 12 Hours for the USD/JPY?

The Japanese Yen starts a critical week near the middle of its 3-month trading range, but surprises out of the Bank of Japan or US Federal Reserve could quite easily force the long-awaited USD/JPY breakout. Traders look to an especially pivotal 12-hour stretch starting with the highly-anticipated BoJ decision early Wednesday morning GMT and the US Fed later that evening.

The key question for the USD/JPY is straightforward: will either the Japanese central bank or its US counterpart finally break the deadlock and force worthwhile currency volatility?

A majority of analysts expect BoJ Governor Haruhiko Kuroda will announce fresh monetary policy easing in response to persistently low domestic inflation, and failure to do so would likely send the Japanese Yen considerably higher (USD/JPY lower). There is considerable uncertainty, however, in what forms any fresh easing might take and subsequent effects on the Yen exchange rate. Kuroda himself said drastic policy steps could be taken and there remains ample scope for interest rate cuts as well as unconventional types of policy easing. It is of course important to note policy rates are already negative and the bank’s so-called Quantitative and Qualitative Easing (QQE) policy is fast running out of securities to buy.

Many expect the Bank of Japan could cut short-term rates further into negative territory and do a so-called “reverse twist” where they focus on buying short-term debt in order to steepen the JPY yield curve. A flat yield curve—where short-term and long-term interest rates are the same—hurt bank profits and imply investors see little scope for higher growth and interest rates in the future. In other words, a steeper yield curve is better. But will artificial steepening prove beneficial? This is a much more difficult question to answer, and how the Japanese Yen might respond is even less clear.

Traders will have relatively little time to digest the Bank of Japan decision ahead of the critical US Federal Reserve’s rate announcement—likely prove the most market-moving event ahead of the US Presidential Elections in November. Here again there are a great range of potential outcomes, and whether or not the Fed hikes rates or strongly hints at future rate hikes may determine the US Dollar’s price trend.

It is subsequently little exaggeration to claim this is the week which will decide direction for the USD/JPY. The weight of expectations is riding especially high for the Bank of Japan, and if it fails to ease policy the JPY could move significantly higher. The bar is somewhat lower for the US Federal Reserve as interest rate traders predict a mere 20 percent chance of a rate hike. A surprise hike would almost certainly move the US Dollar higher, but the lack of a move will shift focus to Fed rhetoric and whether or not it might move at its December meeting.

There is everything to play for in a critical week for the USD/JPY exchange rate ahead. - DR

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

DISCLOSURES