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
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
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
More View more
Real Time News
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/GzEp3gCAe5
  • US equities continue to run higher with the Nasdaq 100 setting a fresh all-time-high, not even three months after giving back almost a third of its value in about a month. Get your #Nasdaq technical analysis from @JStanleyFX here: https://t.co/1LI54uvI8x https://t.co/e9FvSLqfaA
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/UyQ4i0AihI
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
  • The price of #gold plunged 1% immediately after the stunning US jobs report crossed the wires. Get your market update from @RichDvorakFX here: https://t.co/8i0L6YIqjy https://t.co/y9dIXazJf9
USD/JPY Technical Analysis: Yen Drops Most In Year on BoJ Negative Rates (Levels)

USD/JPY Technical Analysis: Yen Drops Most In Year on BoJ Negative Rates (Levels)

2016-01-29 15:30:00
Tyler Yell, CMT, Currency Strategist
Share:

Sign Up for a Free Yen Trading Guides Here

Talking Points:

  • USD/JPY Technical Strategy: BoJ Delivers Negative Rates, Upside Favored
  • USD/JPY Broke Through 2016 Opening Range High of 120.50
  • JPY Clearly Weakest Currency Now That BoJ Forces It Lower

Aren’t borrowers supposed to compensate lenders by using cash today? Not in today’s world as made evidence by another central bank pushing interest rates below zero. This morning, the Bank of Japan announced that they would adopt adopts a negative interest rate strategy, causing the JPY to drop across the board by the most in a year.

We recently noted that the JPY had been strengthening against G10 currencies and that unless the BoJ forced the market, the strength would continue. They seemed to agree that the JPY needed to be adjusted lower by their monetary policy, and a weaker JPY appears now to be the path of least resistance. This surprising move comes nearly a month after BOJ's Kuroda said the BoJ had no plan to adopt negative rates now, given the success the Federal Reserve had seen in stimulating the economy without resorting to negative rates.

What now appears clear is that the US Dollar is set to take over as a leading G10 currency, which will likely put further strain on the global economy. While this effect is not as clear in how it will play out, further deflation is what central banks have continued to fight unsuccessfully, and the Bank of Japan seems to show by actions that they have more to fight.

Another Behavior Change in USDJPY As Upside Is Forced

USD/JPY Technical Analysis: Yen Drops Most In Year on BoJ Negative Rates (Levels)

The chart above shows an effective price channel that is drawn off key pivots in mid-2015 that have done a fair job of framing price action. We recently pushed off the lower bound of the channel, and it is fair to say that we are now making a move to the channel top near 122.50, and we appear to be doing so in a hurry.

The Bank of Japan announcing negative interest rates for the first time in their history appears to erase the downside probability for now. Given the strength of the US Dollar and the preference of US Dollars in a negative rate world, attention is now toward new highs beyond the 2015 high of 125.85. This view will remain in focus as long as the Fed keeps a focus on higher interest rates, and a weaker Yen continues to be forced by the Bank of Japan. Trends should not be fought, and the 4-year trend higher in USD/JPY looks ready to resume higher.

T.Y.

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

DISCLOSURES

News & Analysis at your fingertips.