The current strengthening of the Japanese Yen indicates that the Bank of Japan’s recent ¥10 trillion monetary easing is losing its effect. Economist expect the Bank of Japan to decide to continue stimulating the Japanese economy during tomorrow’s meeting through the expansion of bond purchases by ¥5-10 trillion. New inflation forecasts are expected to come out as well.
The BoJ President assumes that any monetary policy has a reserved impact on deflation. That is why the expected measures may eventually turn out less effective.
According to MacNeil Curry, a currency strategist at Bank of America, USDJPY has finished retracing and is ready for another rally to make another high of the year. The expected targets are 84.82 and 85.45.
According to , the Japanese yen continues its mid-term latish movement against the US Dollar. USDJPY has finished forming an upswing – wave А(С) or shortened С. A break below the MF pivot 81.06, will start a downswing - wave А/В of Н16. The closest levels of support will be found at 80.84, 80.64, 80.46. A break and consolidation above 81.77 will start a mid-term uptrend. If this is the case, 82.18 will become the closest major level of resistance.
