BOJ Intervention: Japanese Sneak Attack On The Forex Market?


(JP) Japan Fin Min Azumi refused to comment on talks of stealth intervention and reiterated that the declined in equities and strong yen are not reflective of Japan’s true economy.

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(JP) Japan PM Noda replaced 5 ministers in his cabinet in order to garner support for the sale tax hike bill.

(JP) IMF’s Shinohara: To issue new language on JPY currency next week.

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  • BOJ can do more at tackle deflation.
  • Government needs to do more to increase demand.
  • Japan still has time to work on its debt situation
  • Sees room for BoJ to purchase more assets

How to interpret these headlines?

Traders were perplexed after Friday’s NFP release and saw JPY became weaker than USD after initially strengthening to the 77.60 level.  Market saw an initial boost in USDJPY strength at the open of trading this week, largely reflecting the potential of BOJ intervention that drove the Yen weaker, despite of the across the board weakness in the Greenback.

Because of the timing and the implication, I believe 78.0 level with USDJPY is now crucial and potentially could serve as a floor for the pair…  If BOJ were to maintain their interests in this, then I’d stay away from further JPY buying, at least until the Fed announces another round of QE.

FUNDAMENTALS
Forex Weekly Outlook May 22 ~ 26, 2017
Forex Weekly Outlook – May 15 ~ 19, 2017
Japan’s below zero rates complicate BOJ’s efforts to kick-start growth, end deflation
BOJ cuts key interest rate to -0.1%, will cut lower if needed
Central banks cannot keep pumping cheap credit into series of asset bubbles
About Henry Liu

My name is Henry Liu and I am a Forex Trader and Mentor. I help traders achieve consistent income trading Forex while spending less time trading. My focus in trading is a combination of Fundamental Analysis, Technical Analysis, and Market Sentiment. Far too many retail Forex traders concentrate on just one aspect of trading, technical analysis, and ignore everything else; it is my goal (and vision) to educate every trader on how to take advantage of news trading and become more balanced traders.

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