JPY Trading Outlook
The Japanese Yen (JPY) the USD/JPY rally stalled at Y78.50 overnight with the crosses weighing on the major after heavy falls in EUR/JPY and AUD/JPY. The daily volatility is increasing on the Yen crosses and this is bringing more speculators back to the relatively quiet currency. The outlook for more Yen weakness will requires the stocks markets and risk appetite to pick up or the safe haven demand for Yen will trump the speculative carry trade.
The Japanese Yen (JPY) broke to fresh year highs and the highest since the interventions back in November to above Y78.30 resistance. The USD/JPY rally is receiving attention from many analysts with some calling the low in place and the improving US data the catalyst for a potential trend change. Many have been burnt buying the USD/JPY in the past decade but the bottom we have seen in the previous 6 months does help make the case that the downtrend is over.
The Japanese Yen (JPY) the USD/JPY shot to Y78 after the BOJ announced a new inflation target for the central bank and government to aim towards a 1.0% annual and also expanded the Asset purchase program by 10 trillion yen to 65T Yen. The EUR/JPY and AUD/JPY failed to track the major however with the risk off trade capping gains.
The Japanese Yen (JPY) USD/JPY rally is picking up momentum as the major tested Y77.80 on Friday and is threatening to break above the Y78 level to target Y80. Crosses are helping lift but the biggest change in the market is the outlook for Japanese growth which is weakening. Q4 GDP came in at -0.6% Q/Q.
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