The markets are too liquid as investors are waiting for the Bank of Japan to take further steps aimed at quantitative easing. However, there is no confidence that the bank will start another round of QE, UBS experts say.
The situation is aggravated by the risks coming from the eurozone. The latest expansion in the bond purchase program by ¥10 trillion has had a temporary impact on the USDJPY exchange rate.
Nevertheless, analysts say that another round of quantitative easing may give a positive effect along with currency interventions. Taking into account the zero rate of inflation in Japan, quantitative easing may become an efficient tool.
Forex.
According to , the Japanese Yen keeps strengthening against the US Dollar. The experts report that USDJPY is forming wave А(С)/С inside a bigger-scale upswing represented by wave А/В of level Weekly.
A further downswing will probably have difficulty overcoming 77.37. The current bearish move will be completed as soon as the price overcomes the top of the MF sloping channel and consolidates above 77.89 (as shown below).
