- The dollar gains momentum throughout the market.
- After the meeting of the Bank of Japan, data from the US and the ECB are coming.
- USD/JPY takes a close look at highs in years.
The USD/JPY is rising on Thursday and is posting a greater than 150 pip bounce from Tuesday’s low. The rises occur after the meeting of the Bank of Japan and before a rise in the yields of sovereign bonds.
The pair found support in Asian session hours at the 138.00 area and then started to move higher. It recently accelerated the rally and reached as high as 138.87, the highest level in four days. It is trading around 138.65, with a bullish intraday tone, which will hold if above 138.35. To the upside, the 139.00 area is the next key level and a daily close above it could suggest a visit to the highs in years.
The rise of the USD/JPY is being accompanied by a strengthening of the dollar in the market, which rose on Wednesday and on Thursday validates that advance; and by higher sovereign bond yields.
From BoJ to US data
The Bank of Japan (BoJ) left monetary policy unchanged, with the rate at -0.1% and the 10-year bond yield control curve around 0%. No changes expected soon. The monetary authority did raise the inflation forecasts. He mentioned concern about developments in the foreign exchange market, although without presenting courses of action.
The reaffirmation of the BoJ’s policies leaves intact the divergence with those of the Federal Reserve. Next week it will be the turn of the Fed, which is expected to raise the reference rate by 75 basis points.
On Thursday several reports will be published in the US The reading of the Philly Fed and the weekly report of requests for unemployment benefits will be known. Of importance in addition to the US data, will be the meeting of the European Central Bank, whose impact may affect the entire market.
Technical levels
Source: Fx Street
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