BOJ Monetary Policy Easing Set To Continue – USDJPY At Key Support

Hirohide Yamaguchi – the BoJ Deputy Governor has said the Japanese CB is willing to do whatever is required to get the economy onto a sustainable path.  With this in mind it does not appear that the monetary policy easing cycle that is currently in place is going to be changed in the near to medium term.

The Japanese Yen has seen a dramatic turn and losses against the currency majors this year.  The USD/JPY pair has retraced near to key 82.00 area support, after moving 229% of the ADR today, and may yet see further downside.  However, the directional bias for USDJPY remains to the upside unless there are any major changes to the fundamentals. 

• Other yen pairs including the GBPJPY are likewise approaching key support areas; 130.00 is a major price pivot for GBPJPY which is currently trading is a well defined range between 130.00 and the 133.30 area resistance.
• COT Report – there was a major increase in Japanese Yen net short positions last week for the non commercials with 67,622 net short contracts on the CME versus 25,821 the previous week.  
• Events later this week could see a break out of the recent ranges and the Non Farm payroll report in particular will be closely watched.

USDJPY H4 Chart

GBPJPY H4 Chart