On Wednesday morning, the USD/JPY pair continues the correction; the Japanese Yen is retreating a little bit, but more significant price fluctuations are ahead.
It looks like investors were just tired and bears decided to retreat a bit in the USD/JPY pair. This doesn’t change much on the global scale for the instrument, because main movements are ahead. It’s highly likely that these movements will occur next Monday or Tuesday, when the capital markets will “process” results of the April meeting of oil-producing countries in Doha. Trading participants may need a “safe haven” and the Yen will traditionally fit this role. The current quote for the instrument is 108.84.
According to representatives of the International Monetary Fund, ultra soft monetary policy in Japan brings proper results and should continue, however, it won’t solve all economic problems of the country. The negative interest rate, which is now implemented in the Land of the Rising Sun, must have some limits.
And this is an old story: when the Central Bank of Japan introduced the negative interest rates this year as an additional softening, it said that the period of this instrument is limited. It must be replaced by something of a longer term, which can stimulate the interest to loan products more. So far, the BoJ hasn’t introduced ay alternatives.
If in the nearest future – inside of a week – the Yen acts as a safe market asset again, multi months highs will be updated very fast.
RoboForex Analytical Department
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