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
Oil - US Crude
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
Wall Street
Bearish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am ET on DailyFX! https://t.co/lxd5fZnn4H
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/ZJOEtpGUIq https://t.co/tJWOXZCoBw
  • The US Dollar may seesaw as investors navigate what could be a volatile week packed with US GDP data, rising Covid-19 cases, Q3 corporate earnings and more. Get your #currencies update from @ZabelinDimitri here: https://t.co/UNRcd3c9uA https://t.co/BiUiOV4cXC
  • USD/MXN pushes lower towards a critical support level in the midst of continued political uncertainty. Get your #currencies update from @HathornSabin here: https://t.co/HEAzgJJJjg https://t.co/NU9wYbIuni
  • Gold Forecast - via @DailyFX “Gold price outlook still hinges on stimulus deal expectations and corresponding swings in real yields.” What will I have my eyes on in the week ahead? Link to Analysis: https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2020/10/23/gold-forecast-xau-usd-at-the-mercy-of-a-fiscal-stimulus-deal.html $GC_F $XAUUSD $GLD https://t.co/GWEI4d4mMu
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/rxswe1gVL0
  • Talks between the EU and UK restarted today and will continue over the weekend as negotiators from both sides battle against the clock. Get your #currencies update from @nickcawley1 here: https://t.co/ER8IT1yxYO https://t.co/Jeeu2P9mwB
  • The London trading session accounts for around 35% of total average forex turnover*, the largest amount relative to its peers. The London forex session overlaps with the New York session. Learn about trading the London forex session here: https://t.co/UTWxbnNz7M https://t.co/W9awqb818J
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/lucvsACxu5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/yywnE39MLU
Japanese Yen Exhibits Bullish Behavior as BoJ Braces for Negative CPI

Japanese Yen Exhibits Bullish Behavior as BoJ Braces for Negative CPI

2020-09-19 13:00:00
David Song, Strategist
Share:

Japanese Yen Talking Points

The Japanese Yen has gained against most of its major counterparts even though the Bank of Japan (BoJ) sticks to its Quantitative and Qualitative Monetary Easing (QQE) with YieldCurve Control program in September, and the funding-currency may continue to appreciate over the remainder of the month as the central bank appears to be in no rush to alter the path for monetary policy.

Fundamental Forecast for Japanese Yen: Bullish

The Japanese Yen may continue to exhibit a bullish behavior over the coming days as USD/JPY trades to a fresh monthly low (104.53) following the BoJ interest rate decision, and the exchange rate appears to be on track to test the July low (104.19) as the central bank looks poised to retain the current policy for the foreseeable future.

It seems as though the BoJ will rely on its current tools to support the recovery from COVID-19 as “Japan's economy has started to pick up with economic activity resuming gradually,” and Governor Haruhiko Kuroda and Co. may continue to endorse a wait-and-see approach despite the slowdown in the Consumer Price Index (CPI).

The BoJ warns that “the year-on-year rate of change in the CPI (all items less fresh food) is likely to be negative for the timebeing, mainly affected by COVID-19 and the past decline in crude oil prices,” but goes onto say that inflation is “expected to turn positive and then increase gradually, as downward pressure on prices isprojected to wane gradually.”

The comments suggest the BoJ will refrain from responding to negative price growth even though the central bank retains a 2% target for inflation, and Governor Kuroda and Co. may ultimately stick to the same script at the next meeting on October 29 as the economy is expected to “follow an improving trend.

In turn, it remains to be seen if fresh developments coming out of Japan will sway the monetary policy outlook as Governor Kuroda insists that “the BoJ will continue to solidly cooperate with the government as it manages policy,” and current market trends may persist throughout the remainder of the year as the Federal Reserve’s longer run interest rate forecast remains unchanged from the June meeting.

With that said, the fundamental outlook for the Japanese Yen may continue to shift as the BoJ tames speculation for additional monetary support, and the funding-currency may exhibit a bullish behavior over the coming day as USD/JPY snaps the range bound price action from earlier this month.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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

DISCLOSURES