USDJPY breaks above 136.00 resistance as BoJ is expected to maintain loose policy
USDJPY continues to move sharply higher today, rebounding from 135 support and breaking the 2002 highs. Today, Japanese currency is by far the weakest among majors, while the euro is the strongest, so the scale of movement on the EURJPY is also significant.
Coming back to the yen, it is worth noting that absolutely nothing has changed in the policy of the central bank, despite rising inflation. The BoJ continues to buy bonds, even more aggressively on the recent rise in Japanese yields. Recently, Japanese authorities have expressed concern about the yen being too weak.
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Create account Try a demo Download mobile app Download mobile appIt is worth remembering that nothing lasts forever and the recent surprising move from the SNB is the best example. Nevertheless, the communication from the SNB took place many weeks before the movement. At the moment, there is no such communication from the BoJ. According to Citi, the BoJ's policy will not change until 2023, with the end of the term of the current chairman Haruhiko Kuroda.
USDJPY pair breaks above136 level. One can see that only in May we had a short-term downward move, as some market partici[ants expected a more dovish Fed. Now everything indicates that the Fed will raise rates even to 3.5% this year. If the BoJ policy does not change, and the indexes do not crash by another 20%, there is a chance to test another psychological resistance at 140.00. On the other hand, any signal of changes in the BoJ policy may end the current trend. Source: xStation5
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