28 Apr 2016
USD/JPY: bulls take the lead before BoJ
USD/JPY is going to be where the action is today, well, certainly where all the attention is.
BoJ: A Busted Flush and The Death of Equities
USD/JPY has been supported with the positive open in Asian equities that followed a decent lead from Wall Street on the back of the FOMC statement and Fed no change decision. The industrial production figures in Japan and bid energy has supported markets in Asia in general. We also had the CPI numbers in the opposite direction of BoJ's hopes, so this too weighs on the Yen in the build-up to the BoJ today with no fixed time for the release as usual. However, one should be at one's desk from 11:30am Tokyo, with most releases between 12pm and 1pm Tokyo (1-2pm Syd/11am-12pm Sing/HK).
Analysts at Westpac suggested that USD/JPY is likely to fall steeply if there is no change in policy. Most likely there will be at least some tweaks of the existing suite of policies. Most press reports have focused on increasing purchases of equity ETFs, though probably not changing the already huge JGB purchases and likely maintaining the total pace of QE from JPY80trn p.a. The -0.1% rate on selected deposits held at the BoJ is very likely to be maintained, but the BoJ might join the ECB in offering negative interest rate loans to banks if they lend for specific purposes, perhaps to help earthquake-affected regions.
USD/JPY levels
We are headed towards the next static resistance at USD/JPY has found resistance at the 111.69 level and 50 dma. On a break above there, we are looking at 114.57 as the 1st of March high as next major resistance. However, on the way to there, we need to gather pace through 112.57 and the 31st of March high through R3 on the wide. On the downside, the pivot is located at 111.16 ahead of S1 at 110.99 and S3 at 110.43. Below there is the 20 dma at 109.89 as a key level and 6th of April recovery highs.
BoJ: A Busted Flush and The Death of Equities
USD/JPY has been supported with the positive open in Asian equities that followed a decent lead from Wall Street on the back of the FOMC statement and Fed no change decision. The industrial production figures in Japan and bid energy has supported markets in Asia in general. We also had the CPI numbers in the opposite direction of BoJ's hopes, so this too weighs on the Yen in the build-up to the BoJ today with no fixed time for the release as usual. However, one should be at one's desk from 11:30am Tokyo, with most releases between 12pm and 1pm Tokyo (1-2pm Syd/11am-12pm Sing/HK).
Analysts at Westpac suggested that USD/JPY is likely to fall steeply if there is no change in policy. Most likely there will be at least some tweaks of the existing suite of policies. Most press reports have focused on increasing purchases of equity ETFs, though probably not changing the already huge JGB purchases and likely maintaining the total pace of QE from JPY80trn p.a. The -0.1% rate on selected deposits held at the BoJ is very likely to be maintained, but the BoJ might join the ECB in offering negative interest rate loans to banks if they lend for specific purposes, perhaps to help earthquake-affected regions.
USD/JPY levels
We are headed towards the next static resistance at USD/JPY has found resistance at the 111.69 level and 50 dma. On a break above there, we are looking at 114.57 as the 1st of March high as next major resistance. However, on the way to there, we need to gather pace through 112.57 and the 31st of March high through R3 on the wide. On the downside, the pivot is located at 111.16 ahead of S1 at 110.99 and S3 at 110.43. Below there is the 20 dma at 109.89 as a key level and 6th of April recovery highs.