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
Mixed
Oil - US Crude
Bearish
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
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
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Bloomberg: EU's chief Brexit negotiator to return to Brussels as Brexit talks continue $EUR $GBP
  • DJIA trading above 30,000, back near weekly highs $DJIA https://t.co/7FhDHyQQDv
  • Crude oil prices have been climbing alongside improved risk appetite, but gains may prove limited as production comes back online. Get your #crudeoil market update from @CVecchioFX here:https://t.co/ZtEklqGWHb https://t.co/vPh9QdXkGL
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Gold: 0.49% Oil - US Crude: 0.05% Silver: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/gxPaUKR5sy
  • Some GOP senators voice agreement and progress towards a $900B stimulus package according to Washington Post reporter $USD $DXY
  • The post-Brexit trade talks headlines are like watching a long tennis rally between 'better', 'worse', 'better', 'worse'....
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.64%, while traders in EUR/JPY are at opposite extremes with 73.60%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/X4yxlkKTHE
  • RT @JoeBiden: Once a vaccine is ready and approved, @KamalaHarris and I are going to ensure it’s distributed equitably, efficiently, and fr…
  • UK Govt Sources: Brexit talks have taken a turn for the worse this afternoon $GBP $EUR
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.28% FTSE 100: -0.02% US 500: -0.07% France 40: -0.13% Germany 30: -0.18% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/kihP5x3v59
JPY Rate Forecast: JPY Bears Eye 113 Level

JPY Rate Forecast: JPY Bears Eye 113 Level

2018-09-22 02:00:00
Justin McQueen, Analyst
Share:
Please add a description for the image.

Fundamental Forecast for JPY: Bearish

USDJPY Analysis and Talking Points:

  • Record High US Equity Markets Keeps JPY on the Backfoot
  • Key Risk Events Include: FOMC, US-Japan Trade Talks and Trump-Abe Summit

The Japanese Yen had another soft week, with the currency losing 0.5% against the US Dollar. The fundamental theme alongside the technical set up suggest that the recent weakness is set to continue. During the past week, the BoJ stuck to its ultra-loose monetary policy stance, reiterating the message that the BoJ will continue QQE until the 2% inflation target is reached. With core inflation running at sub 1%, this suggests that the exit is not expected for some yet. Consequently, US-JP bond spreads have continued to widen with the US 10yr pushing back above the key 3% level, which in turn has pushed USDJPY towards the 113.00 handle. For the upcoming week, we remain bearish on the Japanese Yen.

The beginning of the week will see the $200bln worth of tariffs on Chinese goods come into effect with a levy rate of 10%, as opposed to previously touted 25%. With price action somewhat muted for the Japanese Yen upon the announcement from the Trump administration, it is likely that the imposition will also be met with a muted reaction. Elsewhere, with the US equity markets printing fresh record highs, risks to USDJPY remain tilted to the upside as risk trends continue to spur outflows from the Yen.

Next week’s Economic Calendar

The recent rise in USDJPY faces a big test this week amid a slew of key risk events, which include the Federal Reserve rate decision, US-Japan trade talks and a summit between Trump and Abe. With the Federal expected to raise rates at the upcoming meeting and reaffirm its current rate path, the JPY is vulnerable to slipping past 113 against the Dollar. Markets will be closely watching the progress made with trade talks between the US and Japan in which failure to make progress could halt the USDJPY rise.

JPY Rate Forecast: JPY Bears Eye 113 Level

Source: DailyFX

USDJPY PRICE CHART: DAILY TIMEFRAME (April-September 2018)

JPY Rate Forecast: JPY Bears Eye 113 Level

Chart by IG

Technical Analysis

On the daily timeframe the bias continues to suggest that further upside is to be had in the pair following the breach above the 76.4% Fibonacci Retracement at 112.36. Consequently, the upside targets are at the psychological 113 handle before a test of the July peak at 113.17.

JPY TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

Other Weekly Fundamental Forecast:

New Zealand Dollar Forecast - Fed, RBNZ Risk Derailing Remarkable New Zealand Dollar Recovery

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

DISCLOSURES