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USD/JPY – Japanese yen jumpy as BoJ announces freeze on rates

USD/JPY is showing some movement on Thursday, continuing the trend seen on Wednesday. Currently, the pair is trading at 111.88, down 0.28% on the day. On the release front, the Bank of Japan maintained interest rate levels. Later in the day, Japan releases Tokyo Core CPI and retail sales. In the U.S., durable goods orders is expected to rebound with a gain of 0.7%, after a sharp drop of 1.6% in the previous release. Core durable goods is projected to gain 0.2%. As well, unemployment claims is forecast to rise to 199 thousand. On Friday, the U.S. releases the initial reading for first-quarter GDP, with an estimate of 2.2%. We’ll also get a look at UoM consumer sentiment, which is expected to drop to 97.1 points.

As expected, the Bank of Japan made no changes to monetary policy, maintaining short and long-term interest rates at extremely low levels. However, the markets reacted after the bank announced that rates would be frozen until  the spring of 2020 at the earliest. Despite years of ultra-low rates, inflation remains stubbornly low, as the BoJ target of 2.0% remains elusive. There is a growing perception that policymakers have run out of ideas and tools for creating stimulus. The economic shock of the global trade war has hampered the Japanese economy, which is heavily dependent on trade with the U.S. and China. There have been reports of significant progress in trade talks between the U.S. and Chinese officials, but until a deal is signed, Japan’s economy will likely continue to flounder, making the yen less desirable to investors.

It’s a two-speed world out there [1]

USD/JPY near 4-month high with BOJ on hold [2]

Wednesday (April 24)

Thursday (April 25)

Friday (April 26)

*All release times are DST

*Key events are in bold

USD/JPY for Thursday, April 25, 2019

USD/JPY April 25 at 6:30 DST

Open: 111.20 High: 112.24 Low: 111.74 Close: 111.88

USD/JPY Technical

S3 S2 S1 R1 R2 R3
109.37 110.28 110.90 112.16 112.93 113.70

USD/JPY posted slight losses in the Asian session and this trend continues in European trade

Further levels in both directions:

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 [6]

Market Analyst at OANDA [7]
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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