USD/JPY – Steady as BOJ Holds Course

USD/JPY is showing little movement in Wednesday trading, as the pair trades in the mid-104 range late in the European session. In economic news, the Bank of Japan announced in a policy statement that it was maintaining its monetary easing scheme. Japanese All Industries Activity rebounded in December, meeting market expectations. There are no US releases until Thursday, when we will get a look at the all-important Unemployment Claims. Meanwhile, the World Economic Forum has kicked off in Davos, Switzerland.    

As expected, the BOJ announced that its aggressive monetary plan would continue. Under the scheme, the BOJ will continue to expand the monetary base by 60-70 trillion yen annually. The Bank noted that the economy continues to recover at a moderate pace, with the GDP for 2013 expected to expand by 2.7%, but drop to a 1.4% gain in 2014. Inflation is projected at 0.7% gain in 2013, jumping to 3.3% in 2014.

The World Economic Forum kicks off Wednesday in Davos, Switzerland. The prestigious event will see senior political officials, head of foreign banks and business people from dozens of countries meet and mingle. Traders should note that currency markets can be affected by statements issued at the forum, particularly those made by central bankers or other senior officials.

Weak inflation concerns are not restricted to Europe or Japan, as the US has also been plagued by persistently low inflation, an indication of an underperforming economy. This was underscored by Core CPI, which posted a weak gain of just 0.1% in December. Producer Price Index posted a gain of 0.4%, reversing directions after three consecutive declines. Last week, Chicago Fed President Charles Evans said that the low rate of U.S. inflation is “both puzzling and worrisome,” and enough reason to maintain low interest rates, even if the employment picture continues to brighten. Analysts will be watching closely whether incoming Fed chair Janet Yellen shares these sentiments. Yellen takes over the helm of the Federal Reserve on February 1, replacing Bernard Bernanke.


USD/JPY for Wednesday, January 22, 2014

Forex Rate Graph 21/1/13

USD/JPY January 22 at 13:15 GMT

USD/JPY 104.36 H: 104.56 L: 103.97


USD/JPY Technical

S3 S2 S1 R1 R2 R3
102.53 103.30 104.17 105.70 106.85 107.73


  • USD/JPY has edged higher in Wednesday trading. The pair dipped below the 104 line during the Asian session.
  • 104.17 is providing support. This line was breached earlier in the day and remains under pressure. This is followed by a stronger support level at 103.30.
  • On the upside, 105.70 is the next line of resistance. This is followed by a resistance line at 106.85, which has remained intact since September 2008.
  • Current range: 104.17 to 105.70


Further levels in both directions:

  • Below: 104.17, 103.30, 102.53, 101.19 and 100.00
  • Above: 105.70, 106.85, 107.73 and 108.77


OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions in Wednesday trading. This is reflected in what we are seeing from the pair, as the dollar has edged higher. Long positions have a majority in the USD/JPY ratio, indicating trader bias towards the dollar continuing to gain ground.

The pair is trading quietly on Wednesday. With no US releases on Wednesday, it could be a quiet North American session for USD/JPY.


USD/JPY Fundamentals

  • 3:20 Bank of Japan Monetary Policy Statement
  • 4:33 Japanese All Industries Activity. Estimate 0.4%. Actual 0.3%
  • 7:22 Bank of Japan Press Conference


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.