Back
4 Apr 2013
Forex: USD/JPY - buyers protecting 92.40/75 demand ahead of BoJ
FXstreet.com (Barcelona) - It's finally here, the long awaited BoJ monetary policy decision under the new leadership will be published later in Asia, a more than likely catalyst to see plenty of volatility in the Yen.
Moves will depend in large part on how aggressive the central bank is to implement a new easing program that satisfies market expectations, thought to be very high as per the poor performance of the Yen in the last months.
According to Eamonn Sheridan, editor at Forexlive: “There is no fixed schedule for BOJ announcements, but past experience would suggest sometime after 0300GMT...", pointing out that "the more protracted the negotiations at a the BOJ policy board meeting, the later the announcement is likely to be."
Since the meeting will have plenty of options for deliberation, it is likely to be a long one, "so expect the announcement sometime after 0330GMT, but before 0530GMT" Eamonn adds. Later at 6.30GMT, BOJ governor Kuroda has scheduled in a press conference, which will be followed very closely too.
Sean Lee, founder at FXWW, notes: "The market has waited expectantly for this first Kuroda BOJ policy statement for months now and the Yen has depreciated by up to 20% against certain currencies during this period. I’m not sure that the Yen has a whole lot more short-term downside and the risk in my eyes is that the BOJ cannot fulfil the market’s excessive expectations."
From a risk-reward perspective, "it would suggest to me that the main initial event risk for pairs like USD/JPY will be to the downside" Sean says. While longer term bulls may be keen to buy deep dips, "if the BOJ really disappoints, we could see levels near 88.50 in a hurry" Sean adds.
Linda Yueh , economist at Bloomberg, comments on Twitter that "Japan central bank is likelyt to buy longer term govt bonds", a story also carried by djfxtrader Twitter account, saying "BOJ To Buy Longer-Dated JGBs", citing sources at Nikkei. However, there are other more conflicting reports.
However, there are conflicting bank reports on what the BOJ will do, as Sean observes: "Some saying that Kuroda will be aggressive straight away whilst others say it may take some months for him to get into his stride."
On the USD/JPY key levels, there are two sequence of demand-sensitive zones at 92.75/40 first, tested twice this week, followed by 92.40/92.00, as the second layer where demand orders will probably be stacked.
On the upside, first conventional resistance is at 93.70 double top, with supply overhead at 93.80/94.05, as per the drop-base-drop from April1 thru Europe, followed by 94.25/94.35, next supply produced on the slide from April 1 too thru Asian open.
Moves will depend in large part on how aggressive the central bank is to implement a new easing program that satisfies market expectations, thought to be very high as per the poor performance of the Yen in the last months.
According to Eamonn Sheridan, editor at Forexlive: “There is no fixed schedule for BOJ announcements, but past experience would suggest sometime after 0300GMT...", pointing out that "the more protracted the negotiations at a the BOJ policy board meeting, the later the announcement is likely to be."
Since the meeting will have plenty of options for deliberation, it is likely to be a long one, "so expect the announcement sometime after 0330GMT, but before 0530GMT" Eamonn adds. Later at 6.30GMT, BOJ governor Kuroda has scheduled in a press conference, which will be followed very closely too.
Sean Lee, founder at FXWW, notes: "The market has waited expectantly for this first Kuroda BOJ policy statement for months now and the Yen has depreciated by up to 20% against certain currencies during this period. I’m not sure that the Yen has a whole lot more short-term downside and the risk in my eyes is that the BOJ cannot fulfil the market’s excessive expectations."
From a risk-reward perspective, "it would suggest to me that the main initial event risk for pairs like USD/JPY will be to the downside" Sean says. While longer term bulls may be keen to buy deep dips, "if the BOJ really disappoints, we could see levels near 88.50 in a hurry" Sean adds.
Linda Yueh , economist at Bloomberg, comments on Twitter that "Japan central bank is likelyt to buy longer term govt bonds", a story also carried by djfxtrader Twitter account, saying "BOJ To Buy Longer-Dated JGBs", citing sources at Nikkei. However, there are other more conflicting reports.
However, there are conflicting bank reports on what the BOJ will do, as Sean observes: "Some saying that Kuroda will be aggressive straight away whilst others say it may take some months for him to get into his stride."
On the USD/JPY key levels, there are two sequence of demand-sensitive zones at 92.75/40 first, tested twice this week, followed by 92.40/92.00, as the second layer where demand orders will probably be stacked.
On the upside, first conventional resistance is at 93.70 double top, with supply overhead at 93.80/94.05, as per the drop-base-drop from April1 thru Europe, followed by 94.25/94.35, next supply produced on the slide from April 1 too thru Asian open.