Home Sports USD/JPY retreats against a recovering dollar as the BOJ offers no help

USD/JPY retreats against a recovering dollar as the BOJ offers no help

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USD/JPY Price and Chart Analysis

  • The Bank of Japan reaffirms its position.
  • USD/JPY may check 150 or higher in coming days.

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The Bank of Japan today left all monetary policy levers intact as expected and confirmed it will continue to monitor JGB yields to help lift Japan’s ailing economy, stoke inflation and support Japanese yen depressed. At the same time, the central bank said it did not see the weak yen “offering much opportunity for the Japanese economy,” although if “the fall in the yen is sustained, it will have a positive impact on the economy.” A mixed message, but one that is likely to push the Japanese yen lower official intervention to support the currency considered only if USD/JPY falls too fast or too far. There will come a time when markets will ignore further verbal warnings of intervention and fully test the central bank’s resolve to prevent a further collapse of the yen.

JPY Awaits Kuroda, Intervention Threat, Key US Inflation Data After Dovish BoJ

In further efforts to stimulate the economy, Japanese Prime Minister Kishida announced $200 billion in spending to help families and businesses with wages, energy costs and tourism high on the support agenda.

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The US dollar is pushing back after dropping more than four big digits in the past week. Today’s rally was fueled by the recent rout in the US tech sector, which saw some of the big names including Meta and Amazon down 20%+ after they released their Q3 earnings. The US dollar remains a hedge in tough times.

USD Daily Price Chart – October 28, 2022

USD/JPY is back above 147.00 after last Friday’s intervention sent the pair down to the mid-145s. Today’s gains on the dovish side of the BOJ are muted, but with US core PCE released later today, any beat or miss expected, currently 5.2% y/y and 0.5% m/m, will add to the volatility of the coming couple of weekends. The Bank of Japan stepped in and bought the Japanese yen on Friday afternoon last week, so caution is warranted heading into the weekend.

To learn about all the economic data and events that move the market, see DailyFX Economic Calendar.

USD/JPY Daily Price Chart – October 28, 2022

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Retail traders increase net longs and decrease net shorts

Retail trader data shows that 29.89% of traders are net long traders with a 2.35 to 1 ratio of short to long traders.The number of net-long traders is 14.54% higher than yesterday and 21.61% higher than last week, while the number of net-short traders is 5.67% lower than yesterday and 37 .17% lower than last week.

We generally take a contrarian view on crowd sentiment, and the fact that traders are net short suggests that USD/JPY prices may continue to rise. However, traders are less net than yesterday and compared to last week. Recent changes in sentiment warn that the current The USD/JPY price trend may soon change to the downside, despite the fact that traders remain net short.




customers pure long.




customers pure short.

Change to

Longing

Shorts

O.I

Every day 18% -4% 2%
Every week 28% -39% -26%

What is your view on USD/JPY – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1.

https://www.dailyfx.com/news/usd-jpy-yielding-to-a-revitalized-dollar-as-the-boj-offers-no-help-20221028.html

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