Yahoo Finance USD/JPY Fundamental Daily Forecast – Selling to Continue Until Japanese Officials Speak Up
The Dollar/Yen continues to plunge early Monday after taking out with conviction a key long-term 50% level at 111.020 and a main bottom at 110.836. The downside momentum created by the selling pressure has put the Forex pair in a position to challenge the long-term Fibonacci level at 110.145. This is the trigger point for an even steeper decline.
At 1032 GMT, the USD/JPY is trading 110.570, down 0.426 or -0.38%.
Last week, the sell-off started when the Bank of Japan trimmed some of its monetary stimulus. This raised speculation that the Bank of Japan would end its stimulus plan sooner than expected.
Today’s selling pressure is being fueled by comments from Japan’s central bank governor that highlighted Japan’s economic recovery.
According to CNBC, “While Bank of Japan Governor Haruhiko Kuroda reiterated the central bank’s resolve to maintain its massive stimulus program until 2 percent inflation is achieved stably, he also said the country’s economy was expected to continue moderately expanding.”
“Core consumer prices are rising around 1 percent, Kuroda said in a speech to BoJ regional branch managers. This was a slight change from his previous speech to branch managers, when he said core consumer prices were around zero.”
The sell-off is actually being controlled by traders but eventually we expect to hear some serious talk from Japanese officials. They do not want to see a strong Yen. Once they start to rev up the talk of a weaker Yen, the selling against the USD/JPY is likely to subside.
This article was originally posted on FX Empire
