USD/JPY – Little Change as BOJ Releases Minutes of Policy Meeting

The Japanese yen is steady, as USD/JPY trades in the mid-93 range. The pair had tested the 94 line on Monday, but retracted after Japanese Finance Minister Taro Aso stated that the government would not be purchasing foreign bonds as part of its monetary easing platform. The Bank of Japan released minutes of its previous policy meeting, in which the BOJ reiterated its commitment to eliminate deflation. Japan will release Trade Balance figures later on Tuesday. The US markets are back in action, but there is only one release – the NAHB Housing Market Index.

In the US, recent economic releases have been solid, raising hopes that the US recovery is gaining traction. UoM Consumer Sentiment and the Empire State Manufacturing Index both improved nicely. Consumer Sentiment rose to 76.3 points, exceeding the estimate of 74.8 points. The Manufacturing Index jumped 10 points, well above the forecast of -2.1 points. The markets were pleased with the data, as both indicators have been struggling recently. These numbers come on the heels of excellent US employment data. If US indicators continue to point to an improving US economy, we could see the dollar push higher at the expense of the yen.

In Russia, the G-20 concluded a two-day meeting on the weekend. The talks were attended by finance ministers and central bank governors, and the final statement included a mild comment on the recent volatility in exchange rates. The leaders pledged not to “target our exchange rates for competitive purposes”, and to move more rapidly to market-determined exchange rate systems. The G-20 statement did not make reference to Japan, which has come under fire for monetary policies which have led to free-fall in the value of the Japanese yen. G-20 leaders appear resigned to the yen continuing to slide, but do not want Japanese officials to make public statements which will pull down the currency. Thus, Japan’s major trading partners, although not pleased about the tumbling yen, have tacitly given Japan a green light to continue to stimulate its economy with further monetary easing measures and higher inflation, which will likely have a negative impact on the yen.

Japan was spared a rap on the knuckles at the G-20 meeting, and will press ahead with its monetary easing platform. Finance Minister Taro Aso ruled out purchases of foreign bonds as part of its easing program, and added that the government was considering changing the law governing the Bank of Japan. Aso was responding to remarks by Prime Minister Abe that foreign bond purchases was on the table, and that the government might change the law if the BOJ didn’t meet its 2% inflation target. The BOJ minutes from its last policy meeting showed that two BOJ members were opposed to the doubling of the BOJ’s inflation rate, saying that such a move would not result in greater inflation.


USD/JPY for Tuesday, February 19, 2013

Forex Rate Graph Thursday, February 14, 2013

USD/JPY February 19 at 11:30 GMT

 USD/JPY 93.50 H: 93.92 L: 93.36


USD/JPY Technical

S3 S2 S1 R1 R2 R3
91.94 92.53 93.14 93.73 94.59 95.27


In Tuesday trading, USD/JPY is trading quietly. The pair is facing weak resistance at 93.73. The line of 94.59 is stronger.  On the downside, 93.14 is providing support, but this line could be tested if the yen can muster any strength. The next support level is at 92.53.

  • Current range: 93.14 to 93.73.


Further levels in both directions:

  • Below: 93.14, 92.53, 91.94, 91.30 and 90.91.
  • Above: 93.73, 94.59, 95.27, 96.06 and 97.48.


OANDA’s Open Position Ratios

USD/JPY is not showing any significant movement. This lack of activity is reflected in the pair, which is showing very little movement. Trader sentiment is evenly split between long and short positions, indicating that we could see a break out in either direction.

The pair is quietly trading in the mid-93 range, but the lull in activity may not last very long. The pair has been testing the 94 line, albeit without much success. We could see USD/JPY continue to try and push up into 94 territory.


USD/JPY Fundamentals

  • 15:00 US NAHB Housing Market Index. Estimate 48 points.
  • 23:50 Japanese Trade Balance. Estimate -0.59T.


*Key releases are highlighted in bold

*All release times are GMT


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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