The USD/JPY pair is back to the center of its mid-term trading range, but still can make some sharp movements.
The Japanese Yen is standing still in the middle of the week. The previous trading session was no good for the Yen, the day before it was growing against the USD. The instrument has been “wandering” inside the narrow flat for several days, but hasn’t reached the middle of its mid-term range yet. The current quote for the pair is 110.00.
The Japanese economy continues recovering slowly, although consumer spendings are still not very high according to Haruhiko Kuroda, the head of the BoJ. Salary increase is still a bit behind the targets set by the Central Bank. Nevertheless, the increase of the Japanese GDP must be entirely credited to the QE of the BoJ. The QE program operates without any time limitations and will continue as long as it has to. It appears that the program is going to exist for another 12 months, because the Japanese economy needs it.
The situation with the Yen is quite complicated. Because of the fact that G7 hasn’t supported the country’s idea relating to possible currency interventions in order to stabilize the exchange rate and increase the demand on the Japanese Yen, movements in the currency section may remain very intense. The expensive Yen is not good for exporters and the BoJ, but it can get cheaper only if the USA FRS takes aggressive steps in the monetary policy in the nearest future. However, it’s not as obvious as investors might want.
The USD/JPY pair will not swing up and down the way it did in 2007 and 2008, but the instrument remains quite volatile.
RoboForex Analytical Department
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