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USD/JPY – Rangebound As Japanese Markets on Holiday

USD/JPY is starting the new trading week with little fanfare. In European trading on Monday, the pair is trading in the mid-98 range. Japanese markets are closed on Monday for a holiday. Over in the US, it’s a quiet day, as the only events on the schedule are Factory Orders and speeches by two Federal Reserve policymakers.

The Federal Reserve met for a policy meeting last week, the first since Congress reached an agreement on the debt ceiling and the shutdown. As expected, the Fed said that it would maintain QE at current levels of $85 billion each month. However, the Fed’s policy statement was less dovish than expected, as the Fed noted that the economy was expanding “at a moderate pace” and left the door open for QE tapering in December. However, the prevailing view in the markets is that short of a sharp turnaround in US numbers, QE tapering will be on hold until early 2014.

After a host of weak numbers early in the week, US numbers showed some improvement. Unemployment Claims practically matched the forecast, and ISM Manufacturing PMI beat the estimate. With the Fed unlikely to taper QE before 2014, the QE uncertainty which was has been weighing on the dollar has eased, and the dollar could continue to post gains against the weak Japanese yen.

In Japan, there were no surprises last week from the BOJ, which announced in a policy statement that it would continue its monetary easing policy. The Bank has been expanding the monetary base by 60-70 trillion yen each year, and plans to maintain this level. The Bank forecasts that inflation will rise to 1.9% in 2015, which is within the BOJ’s target of 2.0%. The government’s radical fiscal and monetary policy has created inflation after years of deflation, which has hobbled the economy. However, the Japanese yen has dropped sharply as a result, as the currency trades close to the 100 level.


USD/JPY for Monday, November 4, 2013

Forex Rate Graph 21/1/13

USD/JPY November 4 at 11:50 GMT

USD/JPY 98.66 H: 98.84 L: 98.58


USD/JPY Technical

S3 S2 S1 R1 R2 R3
96.00 97.18 98.15 98.92 100.00 101.19



Further levels in both directions:


OANDA’s Open Positions Ratio

USD/JPY ratio continues to be dominated by long positions, indicative of a strong trader bias towards the US dollar moving higher.

USD/JPY is showing very little movement on Monday. With the Japanese markets closed for a holiday and no major events in the US, we could see the pair continue to drift during the day.


USD/JPY Fundamentals


*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 [4]

Market Analyst at OANDA [5]
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 Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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