Dollar/Yen exchange rate has been volatile ahead of an upcoming meeting.
The Japanese yen is currently not performing well due to various issues both domestically and internationally, including the collapse of all three major banks in the United States being one of the main issues that occurred during this period.
According to Nikkei Asia, the recent turmoil in the global financial markets has had a significant impact on Japanese banks. The top three banks in Japan lost more than $20 billion in market value last week.
Japanese banks were heavily impacted because they held a large amount of bonds when the financial crisis occurred due to an interest rate hike. This resulted in a decrease in the value of these bonds. The reason Japanese banks held so many bonds is due to Japan's lack of economic growth for several decades, which led to a decrease in lending opportunities. The Bank of Japan (BOJ) addressed this issue by injecting liquidity into the market.
Japan's Finance Minister Taro Aso stated that the government is closely coordinating with the Bank of Japan and financial institutions abroad to prevent the impact of banking problems from several western banks.
Carol Kong, a currency investment strategist at Commonwealth Bank of Australia (CBA), has stated that "the demand for US dollars in the swap market has been low recently, which is a positive signal. However, there are still indications of tension in the fundraising market. Therefore, investors in the currency market will continue to be very cautious." She also added that "what is important for Fed Chairman Jerome Powell is to assure investors that the US financial system is strong and can recover quickly."
Meanwhile, most eyes are on the monetary policy of the US Federal Reserve, which is expected to hold a meeting soon. There are expectations that the Fed may aggressively raise interest rates to ease pressure on the financial sector.
Investors are waiting to see the outcome of the Fed's policy meeting on March 21-22. The CME FedWatch tool shows that investors expect a 26.2% chance that the Fed will keep interest rates at 4.50-4.75% at the meeting and a 73.8% chance that the Fed will raise interest rates by 0.25% to 4.75-5.00%.
Technical analysis data (5H)
Resistance : 131.90, 132.08, 132.45
Support : 131.35, 130.98, 130.80
Source: Investing.com
Pivot Points March 21, 2023 05:43 PM GMT+7
Buy/Long 1: If there is a touch of support levels in the price range of 130.98 - 131.35, but unable to break through the resistance level at 131.35, a TP could be set around 132.08 and SL around 130.80 or based on acceptable risk.
Buy/Long 2: If it is possible to break through the resistance level in the price range of 131.90 - 132.08, a TP could be set around 132.45 and SL around 130.98 or based on acceptable risk.
Sell/Short 1: If there is a touch of resistance levels in the price range of 131.90 - 132.08, but unable to break through the support level at 131.90, a TP could be set around 130.98 and SL around 132.45 or based on acceptable risk.
Sell/Short 2: If it is possible to break through the support level in the price range of 130.98 - 131.35, a TP could be set around 130.80 and SL around 132.08 or based on acceptable risk.
Technical Indicators March 21, 2023 05:43 PM GMT+7
