At the start of the week in the Tokyo market, the dollar-yen (USD/JPY) saw early buying. Reports from several media outlets predicted that the Bank of Japan (BOJ) would keep interest rates unchanged at tomorrow’s meeting, and the rise in the Nikkei stock index led to more risk-off selling of the yen. As a result, the dollar-yen rose to the 149 yen range.
In the New York market, weaker U.S. manufacturing and retail data caused the dollar-yen to fall to 148.25 yen, but it quickly bounced back to the 149 yen range.
Afterward, selling was seen again, but with the rise in U.S. stock prices leading to more risk-on buying and selling of the yen, the dollar-yen was bought back up to 149.28 yen by the end of the day.
Tomorrow, the Bank of Japan meeting and the Federal Open Market Committee (FOMC) meeting will take place. As a result, we can expect some unwinding of long yen positions today, and the dollar-yen may test the 150 yen level. However, there has been no change in the BOJ’s stance on keeping rates low, while the U.S. Federal Reserve (FRB) is still in a position to lower rates, meaning the overall downtrend for dollar-yen is expected to continue.
USD/JPY Expected Range: 149.80 yen (38.2%) to 146.70 yen (BB lower limit)
Note: The above information does not guarantee profits. Make your own decisions when trading.