yen weakening

yen weakening

USD/JPY

The Bank of Japan unexpectedly purchased 300 billion yen worth of government bonds yesterday in order to maintain low yield on long-term debt securities. This led to yen weakening by 0.86%.

On the daily chart, the price approached a strong resistance formed by three lines: the target level at 142.82, the MACD line, and the embedded line of the price channel. A slight rebound may occur from this area, after which there will be a new and successful attempt to break through it. If the price consolidates above 142.82, the next target would be 144.73, with further potential growth towards 145.90. The Marlin oscillator being in the positive territory indicates a tendency for further price increases.

A strong upward movement can be seen in the four-hour chart. There may be a rebound towards the support at 141.96 (July 21 high), followed by a resumption of the upward trend. The Marlin oscillator, continuing to rise, will likely withstand corrective declines with

Potential Trigger On Wednesday, starting around 930am est, BOJ Governor Ueda will speak on an ECB forum panel with BOE Gov Bailey, ECB President Lagarde, and Fed Chair Powell. Yen watchers are awaiting any sign that BOJ is getting ready to tweak its control of the yield curve. Quarter-end could also spark a reversal for the steadily weakening yen (132 to 144). Traders will also pay close attention to Friday’s US PCE data as softer inflation data could cement the market’s expectation that the Fed will be done after one more hike. Key Levels Intraday moves have supported a steadily weakening yen, but it may have a neutral bias until we hear from BOJ Gov Ueda on Wednesday morning. Upside resistance may come from 144.70, which is the 70.7% Fibonacci retracement of the October high to January low move. If a daily close occurs above the 145 level, further bullish momentum could target 146.11. To the downside, 143.10 provides initial support. Any hawkish fireworks from Ueda could support the case for a test of the 142.50 region. If Ueda stays the course, the yen could continue to weaken. Japan intervened last fall when the yen weakened towards 145 and after prices breached 150. Sustained weakness won’t be tolerated and expectations for action will grow if yen weakens beyond 145. Everyone has their eye on the 150 level, so it will be interesting to see if that makes that barrier to hard to reach.

USD/JPY The Bank of Japan unexpectedly purchased 300 billion yen worth of government bonds yesterday in order to maintain low yield on long-term debt securities. This led to yen weakening by 0.86%. On the daily chart, the price approached a strong resistance formed by three lines: the target level at 142.82, the MACD line, and the embedded line of the price channel. A slight rebound may occur from this area, after which there will be a new and successful attempt to break through it. If the price consolidates above 142.82, the next target would be 144.73, with further potential growth towards 145.90. The Marlin oscillator being in the positive territory indicates a tendency for further price increases. A strong upward movement can be seen in the four-hour chart. There may be a rebound towards the support at 141.96 (July 21 high), followed by a resumption of the upward trend. The Marlin oscillator, continuing to rise, will likely withstand corrective declines without moving into the negative zone when the price falls.

Potential Trigger: BOJ Governor's Speech and Quarter-End Outlook Impact Yen's Weakening Trend

USD/JPY: Bank of Japan's Surprise Bond Purchase Weakens Yen, Charts Point to Potential Growth

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