Japanese Yen rate, chart and analysis
- The Bank of Japan (BoJ) will continue its “large-scale monetary easing”.
- 140 USD/JPY under threat.
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New Bank of Japan Governor Kazuo Ueda said recently that the central bank will continue large-scale monetary easing — yield curve control — until the 2% price stability target is achieved in a “sustainable and stable manner.” Mr Ueda said the central bank would take its time “to decide on adjustments to monetary easing” as “the cost of impeding emerging developments towards achieving the 2 per cent price stability target, which is finally in sight, by making hasty policy changes would be Likely to be very high.Continuing the central bank’s highly accommodative monetary policy has further weakened the Japanese yen against a group of G7 currencies.EUR/JPY is approaching levels last seen in September 2008, while GBP/JPY has reached Japan recently reached levels last seen in February 2016.
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One of the most active yen pairs, USD/JPY, is pushing higher and yesterday it hit a new multi-month high, partly supported by the continued strength of the US dollar. After months of US rate cuts later this year, markets are now starting to price in another 25 basis point rate hike at the start of the third quarter as the Fed continues to dampen enthusiasm for rate cuts. US government bonds continue to weaken, pushing yields across the curve to multi-week highs, while ultra-short US government bonds are hitting yield levels last seen in decades.
The daily chart shows a positive picture with the pair back above the 3 simple moving averages, with long-term strength confirmed by the break above the 200-dma last week. Confirmed break above swing high of 137.91 at the start of this week which led to a touch short of 140 yesterday and today. Core PCE release from the US today may give fresh support to USD/JPY to climb back to 140 before the long weekend.
USD/JPY daily price chart – May 26, 2023
|
change in |
Longs |
Shorts |
Hey |
| Daily | -9% | -1% | -4% |
| weekly | 11% | 4% | 6% |
Retail trader data shows that 29.23% of traders are net long with the ratio of short to long traders at 2.42 to 1, the number of traders long is 0.29% higher than yesterday and 8.11% higher than last week, while the number of long positions is 0.29% higher than yesterday and 8.11% higher than last week. Traders Traders’ net short positions are 2.82% higher than yesterday and 1.76% higher than last week.
We usually take a view contrarian to crowd sentiment, and the fact that traders are short sellers suggests that USD/JPY prices could continue higher. Positioning is more net than yesterday but less net than last week. A mixture of current feelings and recent changes gives us More contrarian trading bias in USDJPY
Chart via TradingView
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