USD/JPY PRICES, CHARTS AND ANALYSIS:
- USD/JPY Bulls on Their Way to Recovering Yesterdays Losses.
- Bank of Japan (BoJ) Appears to Rule Out Further Tweaks to Yield Curve Control (YCC) at this Stage. Will Markets Get the Message?
- Bullish Trend Remains in Play Without a Daily Candle Close Below 138.80.
- To Learn More About Price Action, Chart Patterns and Moving Averages, Check out the DailyFX Education Section.
Most Read: Japanese Yen Price Action Setups: EUR/JPY, USD/JPY, AUD/JPY
The Yen faced selling pressure following the European open this morning as reports circulated that the Bank of Japan (BoJ) still see the need to continue monetary stimulus. As discussed in my Yen piece earlier this week, market participants have seemingly failed to buy into the BoJ’s stance which continues to provide support to the Yen. Will this change following today’s comments?
BANK OF JAPAN AND POLICY IMPLICATIONS MOVING FORWARD
A potential policy shift has been a key point for market participants since the announcement of a new BoJ Governor earlier this year. Recent Yen strength has partly been down to market participants still harboring hopes of a pivot in policy despite the ongoing rhetoric of Governor Ueda. Yesterday saw the Yen bid in European trade as GDP data smashed estimates likely reigniting hope of a pivot in policy while a miss on initial jobless claims from the US further fueled the decline in USDJPY, printing a daily low around the 138.80 area.
This morning brought fresh reports stating the BoJ see little need to tweak Yield Curve Control in June (YCC) while still seeing a need to continue monetary stimulus. The Central Bank also spoke on its price goal which it believes is still out of sight with the Bank also expecting inflation to remain sticky moving forward. The initial reaction saw the Yen slide while Japanese bond futures rose with USD/JPY approaching the 140.00 mark. The Bank of Japan (BoJ) are conducting a full review of its monetary policy; however, estimates suggest the results will only be available in the next 12-18 months. Will this finally put an end to hopes of a pivot?
US data has had an interesting impact on markets this week stoking volatility more than I had anticipated. We have seen a continuous shift between US Dollar strength and weakness as bulls and bears jostle for position ahead of next weeks key events. To close out the week today the US session is bare in terms of data releases as focus will shift to next week's CPI and Federal Reserve rate decision.
For all market-moving economic releases and events, see the DailyFX Calendar
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FINAL THOUGHTS AND TECHNICAL OUTLOOK
USD/JPY remains bullish in structure without a daily close below the 138.72 handle and yet I’m not convinced that we are ready to print higher highs just yet. It appears USDJPY may need a catalyst for a convincing breakout in either direction as bulls continue to fail at gaining acceptance above the 140.00 psychological handle.
USD/JPY Daily Chart – June 9, 2023
Source: TradingView, Chart Created by Zain Vawda
From an intraday perspective, looking at the H4 chart below USD/JPY faces immediate resistance at 139.80 and the 140.20 levels respectively. Price is currently trading within a wedge pattern while we have been printing lower highs and lower lows since June 5. This however was prior to today’s comments with the question now being whether the comments can inspire a break of the wedge and acceptance above the 140.00 psychological mark.
Alternatively, a failure to break above the 140.00 handle could lead to a renewed downside push as buyers may look to take profit ahead of the weekend. This could facilitate a renewed push to the downside with support at the 138.80 handle before focus turns to the 137.90 zone (March swing high).
USD/JPY Four-Hour Chart – June 9, 2023
Source: TradingView, Chart Created by Zain Vawda
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Written by: Zain Vawda, Markets Writer for DailyFX.com
Contact and follow Zain on Twitter: @zvawda
