Trading news

USD/JPY: possible rebound from this level _26/08/2016

Technical analysis and trading recommendations -

Today, market participants' attention is directed to the speech of the Fed's Janet Yellen. The fate of the dollar is now in her hands. To a lesser extent this also applies to the pair USD / JPY, however, volatility in all pairs of dollar today with the start of performances Yellen (14:00 GMT) should rise sharply. It is best to close to the beginning of her speech to close trading positions.

The base inflation index, published today in the morning in Japan showed a decrease in consumer prices in July. Although pursued by the central bank of the country large-scale easing of monetary policy, inflation in Japan remains well below the target level. The base consumer price index, which takes into account energy prices in July fell by 0.4% compared with the same period last year. The next meeting of the Bank of Japan, as well as the Fed on monetary policy is scheduled for September 20-21. According to the expectations of the central bank's inflation target of 2% should be reached in April 2017 - March 2018.

Slowing inflation seems to reinforce expectations of further easing of monetary policy of the central bank, and this should have a positive impact on the Japanese stock market and bring down the strengthening of the yen.

The continuing uncertainty in the global economy, too become stronger yen, Japan's weak macroeconomic indicators, as well as low inflation forced the authorities to seek a solution to a difficult situation. The limiting factor in the strengthening of extra soft BOJ policy is the US position, which does not approve of any direct action of Japan to weaken the yen.

When, in July, the Bank of Japan decided to refrain from changes in monetary policy, the yen's rise against the dollar almost simultaneously was more than 300 points.
The Bank of Japan left the volume of buying Japanese government bonds at 80 trillion yen and kept the rate on deposits of commercial banks at the level of -0.1%.

Now, "the probability of a determined policy of the Bank of Japan easing next month, more than 50%." As previously announced in August Etsuro Honda, Prime Minister Shinzo Abe adviser.

Friday, 26 Aug, 2016 / 11:51

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