Analysts are skeptical about the Bank of Japan’s new bond purchase program. They say that an increase by ¥10 trillion is not enough to improve the situation.
The program is expected to have a short-term effect as the Bank of Japan is trying to curb the strengthening of the Japanese Yen.
Nevertheless, the experts working for Goldman Sachs assume that the current market reaction suggests that the Bank of Japan should take more aggressive steps, i.e. expand the QE program further or to take some extra steps.
At the same time, the experts form Capital Economics assume that USDJPY will decline down to 75.00 at the end of 2012 and may reach 70.00 in late 2013.
Forex.
According to , the Japanese Yen is still strengthening against the US Dollar. However, the experts report that USDJPY has finished forming a downswing represented by wave А/В of level H4.
A further downswing of USDJPY (below 78.01) will give way to 77.91, 77.72, 77.55. The current bearish move will be completed as soon as the price consolidates above 79.21. A break above 79.65 will terminate the long-term downtrend.
