Dollar is trading higher against the Japanese yen Wednesday as traders
are keeping close watch on the two-day Bank of Japan monetary policy
that kicks off today.
In Asian trading Wednesday, USD/JPY rose 0.21% to 93.62. The pair was likely to find support at 92.43, the low of March 1 and resistance at 94.10, the high of March 6.
Today, BoJ starts its first meeting with Governor Haruhiko Kuroda at the helm. Given Kuroda’s vocal criticism of the previous BoJ regime and his recent pledge to do whatever it take to get Japan’s rate of inflation up to 2%, yen bears risk disappointment if Kuroda is unable to deliver new monetary stimulus measures.
Importantly, traders will want those measures, if announced, to go into effect immediately. Earlier this year, before Kuroda was named the new BoJ governor, the central bank approved additional bond-buying, but disappointed markets by saying that program would not start until next year.
Yen bulls do have some hope, however, as chatter has increased that Kuroda has been able to convince all of the BoJ members to approve additional, imminent monetary easing. With so many yen bears waiting for that to happen, the currency could be vulnerable to short-covering if Kuroda does not deliver.
Elsewhere, EUR/JPY rose 0.04% to 119.80. The pair sought to test support at 118.77, the low from Feb. 25, and resistance at 120.14, the earlier high and is still flirting with four-month lows.
On Tuesday, official data showed the euro zone’s unemployment rate was 12% in February, meaning 19 million people are out of work. The Markit Eurozone Manufacturing Purchasing Managers Index dropped to 46.8 last month, well below the 47.9 posted in February. Readings below 50 indicate contraction.
GBP/JPY is up 0.04% at 141.18 ahead of the Bank of England meeting tomorrow. AUD/JPY advanced 0.26% to 97.89
In Asian trading Wednesday, USD/JPY rose 0.21% to 93.62. The pair was likely to find support at 92.43, the low of March 1 and resistance at 94.10, the high of March 6.
Today, BoJ starts its first meeting with Governor Haruhiko Kuroda at the helm. Given Kuroda’s vocal criticism of the previous BoJ regime and his recent pledge to do whatever it take to get Japan’s rate of inflation up to 2%, yen bears risk disappointment if Kuroda is unable to deliver new monetary stimulus measures.
Importantly, traders will want those measures, if announced, to go into effect immediately. Earlier this year, before Kuroda was named the new BoJ governor, the central bank approved additional bond-buying, but disappointed markets by saying that program would not start until next year.
Yen bulls do have some hope, however, as chatter has increased that Kuroda has been able to convince all of the BoJ members to approve additional, imminent monetary easing. With so many yen bears waiting for that to happen, the currency could be vulnerable to short-covering if Kuroda does not deliver.
Elsewhere, EUR/JPY rose 0.04% to 119.80. The pair sought to test support at 118.77, the low from Feb. 25, and resistance at 120.14, the earlier high and is still flirting with four-month lows.
On Tuesday, official data showed the euro zone’s unemployment rate was 12% in February, meaning 19 million people are out of work. The Markit Eurozone Manufacturing Purchasing Managers Index dropped to 46.8 last month, well below the 47.9 posted in February. Readings below 50 indicate contraction.
GBP/JPY is up 0.04% at 141.18 ahead of the Bank of England meeting tomorrow. AUD/JPY advanced 0.26% to 97.89
