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
Subscribe
Please try again
EUR/USD
Bullish
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
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Heads Up:🇺🇸 Fed Bostic Speech due at 15:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-04-15
  • $USDJPY has continued lower today amidst further weakness from the US Dollar, falling to an intraday low around the 108.60 level, its lowest point in three weeks. $USD $JPY https://t.co/xHm8sp9qsR
  • While things are remarkably quiet in many global indices, the situation on the German $DAX 30 is the most impressive. At a record high, it has carved out the narrowest 7-day historical range (as %age of spot) since October 2017. Break risk high https://t.co/u0d5BTxlsJ
  • Gold ($XAUUSD) is making a bid to break back above a frequented pivot level around 1765. This despite risk trends being up (against its haven status) and the Dollar holding steady (pricing factor) https://t.co/pmbnoxYCXf
  • USD/CAD: A convincing rejection of the 1.26 handle, which also coincided with the 50% fib of the 2021 range. Get your $USDCAD technical analysis from @JMcQueenFX here:https://t.co/VubZkkShN0 https://t.co/zhAZJXtoqm
  • Hey traders! Are we witnessing a clear stretch for S&P500 and Nasdaq? Find out from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/SMh1QQZ7lT
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.46% 🇦🇺AUD: 0.38% 🇯🇵JPY: 0.26% 🇬🇧GBP: 0.05% 🇪🇺EUR: -0.04% 🇨🇦CAD: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/LaMYeDZc9M
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: 0.86% FTSE 100: 0.85% Wall Street: 0.77% France 40: 0.46% Germany 30: 0.32% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/oTS1NQDC68
  • Gold back towards key resistance (1760-65) that has capped rallies over the past two months - US yields at session lows providing the latest push higher https://t.co/u35ePHQXOb
  • Gold back towards key resistance (1760-65) that has capped rallies over the past two months - US yields at session lows providing the latest push higher
Yen Surges to 15-Month Highs: Japanese Inflation as a Pivotal Driver

Yen Surges to 15-Month Highs: Japanese Inflation as a Pivotal Driver

James Stanley, Senior Strategist
Yen Surges to 15-Month Highs: Japanese Inflation as a Pivotal Driver

Fundamental Forecast for JPY: Bullish

Talking Points:

If you’re looking for longer-term analysis on the Japanese Yen, click here for our Trading Forecasts.

The Japanese Yen put in a pronounced move of strength this week as the currency crafted a fresh 15-month high against the US Dollar. Price action in USD/JPY drove-lower Monday thru Thursday, finally running into a bit of technical support on Friday morning. This bearish move broke through the support-side of a range that’s been in-place for more than nine months; and making matters more interesting is the fact that of these fireworks happened with a backdrop of seemingly ‘good’ news.

BoJ Governor Haruhiko Kuroda was re-appointed for a second five-year term atop the bank. While this was largely expected throughout the week, the formal announcement on Friday morning comes-in around the same time as that support bounce; but given dynamics across the FX market, it would appear as though the Friday pullback is more related to an oversold US Dollar seeing a bit of short-cover ahead of a long holiday weekend in the United States.

USD/JPY Weekly Chart: Plunge to Wedge, Trend-Line Support

Yen Surges to 15-Month Highs: Japanese Inflation as a Pivotal Driver

Chart prepared by James Stanley

Governor Kuroda was the architect of the Bank of Japan’s massive stimulus program, coming into play with the election of PM Shinzo Abe in Q4, 2012. Since then, the Japanese economy has added a significant amount of liquidity as the search for 2% inflation continues. With Japan continuing to see inflation levels below one-percent, and even below .5% for the first half of last year - this kept the Yen as a favored currency for strategies of weakness, allowing for outsized bullish moves to develop in pairs like EUR/JPY and GBP/JPY.

More recently, that weakness has started to come into question as investors around the world speculate when the BoJ might actually begin to move away from those uber-dovish policy metrics. At this point, the BoJ has shown no signs of budging, but that hasn’t kept markets from staging a pattern of Yen-strength as inflation has started to creep-higher last month. Inflation came-in at an annualized one-percent in December. This is a 33-month high, and since we’ve had that print, matters of Yen-weakness haven’t really been the same.

Japanese CPI Sets 33-Month High in December: January Inflation Released on Friday

Yen Surges to 15-Month Highs: Japanese Inflation as a Pivotal Driver

Chart prepared by James Stanley

In response to this Yen strength, Japanese Finance Minister, Taro Aso, was directly asked whether or not the Finance Ministry might intervene to stem the flow. He deferred, saying that the gains in the currency weren’t yet enough to begin plotting intervention. In the wake of that announcement, the currency strengthened even more, and this keeps a rather bullish appeal to the Yen as we approach a vitally-important data print next Friday (Thursday at 6:30 PM ET in New York, 11:30 PM in London).

Next Friday will see the release of January inflation numbers out of Japan, and this will likely help to drive Yen-flows in the coming weeks. The next major driver after next week’s inflation print is the Bank of Japan rate decision on March 8-9, and that’s when we can hear how the bank might be looking to manage their QE strategy in the backdrop of rising inflation. But, if next week’s inflation comes out at an annualized one-percent or more, expect a continuation of strength in the Japanese Yen much as we’ve seen since the release of December inflation numbers.

The forecast for next week on the Japanese Yen will be set to bullish.

To read more:

Are you looking for longer-term analysis on Yen? Our DailyFX Forecasts for Q1 have a section for each major currency, and we also offer a plethora of resources on our USD/JPY, EUR/JPY, GBP/JPY, and AUD/JPY pages. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES