Technical analysis and trading recommendations -https://fxpcm.com/en/fx/usdjpy-decline-continues-14062016
More on the deputy governor of the Bank of Japan last week Nakaso said that the end of deflation in Japan through the "decisive" softening "absolutely necessary".
He was echoed by Finance Minister Taro Aso, who said that the Japanese authorities will prevent speculative growth of the yen, continuing, thus threatening direct intervention in the currency market. According to Aso, the recent strengthening of the yen was "swift and speculative" and, if necessary, the monetary authorities of Japan would like to take tough measures.
The closer a referendum in the UK with the question of the further stay of the country within the EU, the more increases the tension and uncertainty of the financial markets and the stronger demand for safe-haven assets.
Against this background, the Japanese yen reached a three-year high against the British pound and the euro, as well as the level of October 2014 in tandem with the US dollar. The results of the latest public opinion polls conducted in the UK say that half or more of respondents in favor of the UK exit from the EU. In the case of such an outcome of the referendum and the country's exit from the EU structure it is hard to imagine the volume of financial flows between the UK and Japan, or between the Eurozone and Japan.
However, Japan itself faces the problem of deflation and a slowdown in economic growth and further strengthening of the yen as a safe-haven country is absolutely unnecessary.
The meetings of the Federal Reserve, the Bank of Japan and Bank of England, which will be held this week, also enhance the atmosphere of uncertainty in the market. The probability of rate hikes in the United States is almost zero, but investors will analyze comments Chairman Janet Yellen for hints on the prospects of higher interest rates.
The inaction of the Fed and the strengthening of the yen increases the pressure on the Bank of Japan in the direction of further easing of monetary policy at a meeting of the bank, which will take place on Thursday.
The pair USD / JPY came close to May and the annual lows near the 105.50 mark, especially rapidly decreasing since February and the beginning of June.
From the news today forward data on retail sales and the export-import prices in the US in May. In the case of growth rates the US dollar strengthened on the foreign exchange market. However, the USD / JPY pair is that the predominant steady downward trend, and the pair is committed to the key support level of 104.50.