• English (en)
Forex Analysis
Japanese Yen Nosedives As BoJ Announces Unprecedented Stimulus

FXOpen

The US dollar rallied against its Japanese counterpart on Friday, taking the price to more than 111.60 following the Bank of Japan (BoJ) monetary policy announcement. The bullish momentum had already triggered yesterday after the better than expected US GDP figure for the third quarter. The upside rally is massively strengthened on Friday, with the price hitting the highest level since September 2007.

Technical Analysis

As of this writing, the pair is being traded around 111.62. After hitting the multi-year high at 111.52, the price fails to find any resistance and is further rallying to print new highs.

usdjpy

On the downside, the pair may find a moderate support around 107.61, as demonstrated by the trend line in the above chart. The overall bias is bullish because of higher low on the daily chart. The bias will remain bullish as far as the 107.61 support area is intact.

BOJ Interest Rate Decision

The Bank of Japan decides to hold the rate at 0.1% in line with expectations. The bank however announced an unexpected increase in the quantitative easing program that caused JPY to plunge against almost every currency.

Reuters/Michigan Consumer Sentiment Index

The US Consumer Sentiment Index remains at 86.4 as compared to 84.6 for the month before, the average forecast of different analysts says. Generally speaking, a high reading gives an indication of increased consumer confidence and is seen as bullish for the US Dollar. Thus a better than expected figure will further support the ongoing upside rally in USD/JPY and vice versa.

Trading strategy

Considering the overall technical and fundamental outlook, selling the pair could be a good option in the short term if the price leaves a bearish pin bar or bearish engulfing pattern on the daily chart.

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting Will Stagflation Persist in the UK? EUR/GBP Volatility May Be an Indicator Market Analysis: Commodity Currencies Find Short-term Bottom USD/CAD Analysis: How the Bank of Canada Decision Affected the National Currency Commodity Currencies, Pound and Euro in Search of Medium-term Bottom

Latest articles
Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting

As expected, the decision on the interest rate had a powerful impact on the markets. Thus, the euro/US dollar pair lost more than 100 pp in just a couple of hours and updated its recent low at 1.0630,
Commodities

Oil Analysis: Finally, A Bearish Reversal?

The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use
Commodities

Central Bank Week Shakes Up Gold Market

Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.