Yen Slips On BoJ’s Continued Loose Policy Expectation

Fundamental Analysis

* BoJ’s Ultra-Loose Policy Hopes Soar: The Japanese Yen continue to weaken against the greenback amid anticipations that the Bank of Japan (BoJ) will maintain its expansionary policy stance during the upcoming meeting on Tuesday. Currently, numerous underlying factors support the possibility of the BoJ moving away from negative interest rates. The BoJ’s preferred inflation gauge, the Consumer Price Index (CPI) excluding fresh food, has consistently exceeded the 2% target for an extended period. Additionally, according to Reuters, Japan’s largest companies have reached agreements with labor unions to implement the most substantial wage increases in 33 years. However, investors are hopeful that the BoJ will refrain from abandoning the prolonged expansionary policy stance, given the absence of a foolproof plan to address the wage-price spiral.

Technical Analysis

* Technical Breakout: USDJPY was traded higher following prior breakout above the previous resistance level 148.95. MACD which illustrate continued bullish momentum signal suggest the pair to further extend its gains.

* Resistance And Targets: If the bullish momentum persists, the price is likely to head towards the resistance level 150.85. Conversely, a breach back below level 148.95 would signal technical retracement or potential reversal for the pair.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving forward, investors will closely watch the BoJ’s press conference to learn when the central bank intends to eliminate its negative interest rates and Yield Curve Control (YCC) policies.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and Japan data, BoJ updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.