What to Expect from Japanese Yen? Further Weakness or Recovery?; May 16, 2022
What to Expect from Japanese Yen? Further Weakness or Recovery?
The Japanese yen is having the worst beginning of the 2022 as the pair has fallen drastically from 113.47 (Jan 2022 Low) to 131.34 (May 2022 High) mark. Today only BoJ Gov Kuroda commented on the FX markets. He added that BoJ is not targeting FX Market. According to BoJ Gov Kuroda, “Recent Rapid FX Moves Are Unfavorable”. He put emphasis to Support Economy with Easing.
On the other side, four more years added for the U.S. Fed Chair Powell’s term. The Senate voted 80-19 last week to confirm Jerome Powell for a second term as Chairman of the Federal Reserve last week, in a bipartisan vote that was largely expected. It simply means that, Powell will stick to rapid interest rate hike Monetary Policy stance and strengthens the U.S. dollar against major peers.
Important to note here that BoJ is not at all in hurry to rise key interest rates and using the Wait and See Approach to fight rising inflation and Covid both. It leads to further weakness in JPY only.
- The Japanese yen trades noticeably higher on Monday and consolidates around 129.00 mark.
- The pair made intraday high at 129.64 and low at 128.69 mark.
- The triple EMA on a day chart is up and H1 chart suggests down trend for the time being.
- A sustained close above 129.48 on H1 chart requires for the upside rally.
- Alternatively, a consistent close below 128.88 on H1 chart will check further key supports.
Take a look and do trade wisely!