22 Jan 2015
USD/JPY jitters ahead of the ECB meeting
FXStreet (Guatemala) - USD/JPY is currently trading at 118.13 with a high of 118.17 and a low of 117.74, up 0.25% on the day.
USD/JPY is up to test the 118 handle again, putting a score into its terrain on the short term charts and the price is back on the bid approaching a 35 pip gain at the time of writing. Overnight was quiet eventful, with Central Banks fuelling the market with impetus. The BoC shocked markets with a surprise rate cut from 1% down to 0.75% while various news sources were reporting that ECB officials said that the European Central Bank will be meeting to discuss the proposed 50B EUR of QE each month and to start this in March. Later today will reveal the fact and markets will likely be jittery leading into the meeting.
"The sources diverged on how long the program would run, with some saying 12 months i.e. EUR600bn headline and others saying end-2016 i.e. EUR1.1 trillion. Most recent talk had been in the EUR600-750bn range. Many details need to be hammered out though, especially the contentious idea that national central banks would bear any default risk of their nation’s debt purchased by the ECB", explained Sean Callow, analyst at Westpac Banking Corporation ABN.
Meanwhile, we will recall from yesterday's session that the BoJ cut their inflation forecasts for the fiscal year from 1.7% to 1%, as expected, but raised their growth forecast to 2.1% for the Financial year. The Bank of Japan's decision was to stay put on its current policy, and that has seen some long US Dollar positions unwound given the disappointments to those expecting additional monetary easing.
From here, the Yen is likely to come under demand around uncertainty as a safe haven and 115.50 would be on the bears map in such scenarios while the bulls will be quick to take advantage of flows into the US and dollar denominated assets with 120.00 on their radars as the medium term target.
USD/JPY is up to test the 118 handle again, putting a score into its terrain on the short term charts and the price is back on the bid approaching a 35 pip gain at the time of writing. Overnight was quiet eventful, with Central Banks fuelling the market with impetus. The BoC shocked markets with a surprise rate cut from 1% down to 0.75% while various news sources were reporting that ECB officials said that the European Central Bank will be meeting to discuss the proposed 50B EUR of QE each month and to start this in March. Later today will reveal the fact and markets will likely be jittery leading into the meeting.
"The sources diverged on how long the program would run, with some saying 12 months i.e. EUR600bn headline and others saying end-2016 i.e. EUR1.1 trillion. Most recent talk had been in the EUR600-750bn range. Many details need to be hammered out though, especially the contentious idea that national central banks would bear any default risk of their nation’s debt purchased by the ECB", explained Sean Callow, analyst at Westpac Banking Corporation ABN.
Meanwhile, we will recall from yesterday's session that the BoJ cut their inflation forecasts for the fiscal year from 1.7% to 1%, as expected, but raised their growth forecast to 2.1% for the Financial year. The Bank of Japan's decision was to stay put on its current policy, and that has seen some long US Dollar positions unwound given the disappointments to those expecting additional monetary easing.
From here, the Yen is likely to come under demand around uncertainty as a safe haven and 115.50 would be on the bears map in such scenarios while the bulls will be quick to take advantage of flows into the US and dollar denominated assets with 120.00 on their radars as the medium term target.