USD/JPY – Japanese Yen Unchanged After Cautious BoJ Minutes

The Japanese yen continues to post gains. In Monday’s North American session, USD/JPY is trading at 106.10, up 0.10% on the day. On the release front, the BoJ released its summary of opinions, and Japan surprised with a trade deficit, the first since October 2015. The deficit came in at JPY -0.20 trillion, higher than the forecast of -010 trillion. There are no indicators in the US on the schedule.

The message was “business as usual” from the Bank of Japan, which released its summary of opinions from the March meeting. Members voted 8-1 to maintain its ultra-accommodative easing program. Given that inflation is around 1%, well of the target of just below 2%, there are no plans for normalization. In the summary, members went as far as stating that if there was an increased risk of a delay in reaching the inflation target, additional easing would be needed. The cautious message from the bank did not surprise the markets, as the yen has started the week quietly.

It’s all but a given that the Federal Reserve will raise interest rates on Wednesday, which would mark the first hike of 2018. According to the CME Group, the odds of a quarter-point raise stand at an impressive 91 percent. What can we expect from the Fed during the year? The pressing question is how many rate hikes will we see in 2018. The current Fed projection remains at three hikes, but a robust US economy has raised speculation that the Fed could accelerate the pace to four hikes, which would be good news for the US dollar. Investors will be keeping a close eye on key US data, especially upcoming inflation indicators. If these numbers improve, we’re likely to see four rate hikes in 2018.

USD/JPY Fundamentals

Sunday (March 18)

  • 19:50 BoJ Summary of Opinions
  • 19:50 Japanese Trade Balance. Estimate -0.10T. Actual -0.20T

Monday (March 19)

  • 9:40 US FOMC Member Raphael Bostic Speaks

*All release times are EST

*Key events are in bold

USD/JPY for Monday, March 19, 2018

USD/JPY March 19 at 11:35 EST

Open: 105.99 High: 106.31 Low: 105.68 Close: 106.00

USD/JPY Technical

S3 S2 S1 R1 R2 R3
103.09 104.32 105.53 106.64 107.29 108.00

USD/JPY posted slight losses in the Asian session. In European trade, the pair reversed directions and posted gains. USD/JPY has ticked lower in the North American session.

  • 105.53 is providing support
  • 106.64 is the next resistance line

Further levels in both directions:

  • Below: 105.53, 104.32 and 103.09
  • Above: 106.64, 107.29, 108.00 and 109.11
  • Current range: 105.53 to 106.64

OANDA’s Open Positions Ratios

In the Monday session, USD/JPY ratio long positions have a majority (70%). This is indicative of trader bias towards USD/JPY reversing directions and moving higher.

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.