Japanese yen is the worst performing G10 currency today. Summary of Opinions from Bank of Japan December meeting showed that BoJ members are still uncertain about the outlook and are in no hurry to change Bank's policy to more restrictive.
On the other hand, Bank of Japan announced its regular bond buying plans for the January-March 2024 period, which was somewhat hawkish. BoJ plans to buy less Japanese government bonds overall, with fewer auctions planned for longer maturities. This indicates loewr upward pressure on bond prices, and lower downward pressure on yields, what may help support JPY in the first quarter of the next year.
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Create account Try a demo Download mobile app Download mobile appBank of Japan January-March bond buying plans:
- 5-10 year: 4 times 400-900 billion JPY vs 4 times 450-900 billion JPY in previous quarter
- 10-25 year: 3 times 100-500 billion JPY vs 4 times 100-500 billion JPY in previous quarter
- Above 25 years: 2 times 50-350 billion JPY vs 3 times 50-350 billion JPY in previous quarter
Taking a look at USDJPY chart at H4 interval, we can see that the pair has recently bounced off the 142.00 area and is attempting to launch another upward correction in the current downtrend. Pair is trying to break above the 50-period moving average (green line) today, which halted corrections a number of times. However, bulls would also need to break above the bearish trendline, currently in the 143.50 area, for the trend to reverse.
Source: xStation5
