FUNDAMENTAL ANALYSIS
Japan is showing signs of recovery as exports and corporate profits improve. However, the Bank of Japan continues its fight against deflation and announced last week a plan to double its December lending program. Despite an improving economical outlook, the BOJ still believes the recovery cannot yet be sustained without the support of policy measures.
The USDJPY remains in a down trend amid selling from Japan exporters, but signs have shown that the yen is slowly recovering its funding currency status instead of the dollar, which should depreciate the currency in the long term.
TECHNICAL ANALYSIS
The daily chart shows that the USD/JPY is still in a down trend. The price is stuck at the middle of a wide range (88.144 - 92.200) although the momentum is to the upside after it failed to fall through 88.00 at the beginning of the month.
A breakout above 92.200 could signal the reversal of the trend. We believe the price is well supported below 89.00, but another risk-aversion wave could very well send the yen to new lows as long as the recovery remains fragile.
Resistance levels:
- 91.08
- 92.20
Support levels:
- 89.75
- 88.14
All information on this page is subject to change. The use of this website constitutes acceptance of our terms of use. Please read our risk disclaimer and privacy policy
