The Japanese yen is showing little movement on Wednesday, as USD/JPY continues to trade in the mid-101 range. In economic news, the markets await the Federal Reserve’s policy statement, with another trim to QE widely expected. In Japan, All Industries Activities posted a strong gain, and BOJ Governor Haruhiko Kuroda delivered remarks at a financial symposium in Tokyo.
Will we see another QE trim on Wednesday? The US Federal Reserve concludes its policy meeting on Wednesday, its first meeting under the tutelage of Janet Yellen. Recent US numbers haven’t dazzled, but they should be strong enough for the Federal Reserve to go ahead with another taper of QE. This would be the third trim of the Fed’s asset-buying scheme, and would reduce QE to $55 billion per month. These tapers are dollar-positive and mark a vote of confidence in the US economy by the Fed, so a taper could give the US a push upwards.
Events are moving fast in the Ukrainian crisis. Voters in Crimea voted overwhelmingly to join Russia in a referendum on Sunday. The next day, Russian Prime Minister Putin formally recognized Crimea as an independent state, paving the way for annexation. The EU and US have slapped targeted sanctions against high-ranking Russian officials, and Western leaders plan to meet during the week to discuss a united strategy to respond to the crisis. So far, the currency markets have not reacted to the events in Ukraine, but that could change if the crisis deteriorates.
USD/JPY for Wednesday, March 19, 2014
USD/JPY March 19 at 13:50 GMT
USD/JPY 101.54 H: 101.69 L: 101.30
- 102.53 continues in a resistance role. This is followed by a resistance line at 103.30.
- 101.19 is providing support. The next support line is the key level of 100.00, which has held firm since last November.
- Current range: 101.19 to 102.53
Further levels in both directions:
- Below: 101.19, 100.00, 99.57 and 98.65
- Above: 102.53, 103.30, 104.17, 105.70, 106.85
OANDA’s Open Positions Ratio
USD/JPY ratio has reversed directions on Wednesday, pointing to gains in long positions. This is not consistent with the pair lack of movement. Long positions make up a majority of the open positions in the ratio, indicating trader bias towards the dollar moving to higher ground.
The yen is trading quietly in the European session. We could see some activity from USD/JPY after the Federal Reserve’s policy statement later in the day.
- 4:30 Japanese All Industries Activity. Estimate 1.3%. Actual 1.0%.
- 5:30 BOJ Governor Haruhiko Kuroda Speaks.
- 12:30 US Current Account. Exp. -88B. Actual -81B.
- 14:30 US Crude Oil Inventories. Exp. 2.4M.
- 18:00 US FOMC Economic Projections.
- 18:00 US FOMC Statement.
- 18:00 US Federal Funds Rate.
- 18:30 US FOMC Press Conference.
*Key releases are highlighted in bold
*All release times are GMT