Yen weakens amid easing economy
The Japanese yen has been heavily depreciating in recent days, following the Bank of Japan's (BOJ) continued stance on exceptional easing and ongoing pressure from fears of a rise in US central bank interest rates.
The BOJ has maintained historically low interest rates and plans to continue with quantitative easing policies and yield curve controls. The 10-year Japanese government bond yield has risen following these movements and is nearing the BOJ's maximum limit of 0.5%, as the bank has announced it will continue with exceptional easing policies for the foreseeable future.
Meanwhile, the bank has increased its estimated inflation rate for the 2023 fiscal year, while data shows that inflation in Tokyo has exceeded expectations in April and returned to its highest level in 40 years. This increase in inflation may push the BOJ to implement more stringent policies towards the end of the year despite the bank canceling its long-term financial policy expectations through a recent announcement.
Mr. Matsusawa, the chief strategist for Nomura Securities in Japan, stated that news about the Federal Reserve's recent policy decision has given investors more confidence in the outlook for the US dollar. He also reinforced that "there is now a higher likelihood that the Federal Reserve will continue to raise interest rates rather than cut them."
Data released on Thursday showed that the US grew at a slower pace than expected in the first quarter, at just 1.1% compared to the expected 2% amid pressure from inflation and high interest rates. The dollar remained mostly stable after the release of this data.
Bond yields have continued to increase due to other factors such as higher-than-expected consumer spending in the first quarter, which rose by 4.2% and a lower-than-expected number of weekly jobless claims.
However, signs of inflation persist, coupled with strong labor market conditions have increased the Fed's incentive to raise interest rates. The market remains uncertain about the direction of monetary policy after the meeting in May as the Fed did not signal a plan to cut interest rates.
Technical analysis data (5H)
Resistance: 137.62, 137.73, 137.89
Support: 137.35, 137.19, 137.07
Name | S3 | S2 | S1 | Pivot Points | R1 | R2 | R3 |
Classic | 137.07 | 137.19 | 137.35 | 137.46 | 137.62 | 137.73 | 137.89 |
Fibonacci | 137.19 | 137.29 | 137.36 | 137.46 | 137.56 | 137.63 | 137.73 |
Camarilla | 137.42 | 137.45 | 137.47 | 137.46 | 137.52 | 137.54 | 137.57 |
Woodie's | 137.09 | 137.20 | 137.37 | 137.47 | 137.64 | 137.74 | 137.91 |
DeMark's | - | - | 137.40 | 137.49 | 137.67 | - | - |
Buy/Long 2: If it is possible to break through the resistance level in the price range of 137.62 - 137.73, you may set TP at around 137.89 and SL at around 137.19, or according to the acceptable risk.
Sell/Short 1: If there is a touch of resistance in the price range of 137.62 - 137.73 but unable to break through the resistance level at 137.62, you may set TP at around 137.19 and SL at around 137.89, or according to the acceptable risk.
Sell/Short 2: If it is possible to break through the support level in the price range of 137.19 - 137.35, you may set TP at around 137.07 and SL at around 137.73, or according to the acceptable risk.
Name | Value | Action |
RSI(14) | 81.376 | Overbought |
STOCH(9,6) | 83.692 | Overbought |
STOCHRSI(14) | 100.000 | Overbought |
MACD(12,26) | 0.840 | Buy |
ADX(14) | 48.467 | Buy |
Williams %R | -1.952 | Overbought |
CCI(14) | 118.6266 | Buy |
ATR(14) | 0.5307 | Less Volatility |
Highs/Lows(14) | 1.1232 | Buy |
Ultimate Oscillator | 72.436 | Overbought |
ROC | 2.762 | Buy |
Bull/Bear Power(13) | 2.1360 | Buy |
Buy:6 Sell:0 Neutral:0 Summary:Strong Buy |