Technical Outlook: The USDJPY currency pair continues to remain weak as investors try to decipher the Bank of Japan’s monetary policy. The currency pair breached the 108.47 level of resistance last month which saw prices posting a decline toward 105.72 region. We expect to see further declines coming. The USDJPY has been now losing for nearly two consecutive months. In the near term, we expect the weakness to continue especially with the weekly chart posting a bearish engulfing pattern. In the near term, USDJPY could be posting declines to test the major yearly support level at 104.27. However, a rebound off this level could be expected This could potentially represent a short term end to the bearish trend in USDJPY as we expect price to bounce back in the medium term.
Fundamental Outlook: The main event risk for the Japanese yen this month will be the Bank of Japan meeting. Last month, the Japanese premier, Shinzo Abe appointed Kuroda for another five year term as the head of the BoJ. For many, this is seen as a continuation of the current monetary policies. However, Kuroda has signaled that central bank officials will start to plan for an exit strategy as and when inflation rises to the 2% BoJ’s target. The central bank has kept a lofty target of the fiscal year 2019 when inflation is expected to reach the target. The Japanese yen remains one of the strongest currencies this year and has also led to many analysts calling it the year of the yen.
Previous USDJPY Monthly and Weekly Forex Forecast
USDJPY Forex Forecast for March 2018
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