USD/JPY is now on the move higher, running around 70 pips and breaking to a higher trading range. Yjr minot 92.88 line was broken as the pair moved from 92.70 to 93.40 at the time of writing. The peak was 93.54 so far.
The main driver is the G-20 statement: it contains a lot of words that everybody can agree on, but does not consist of a mention of Japan’s policies. The complains of various officials regarding Japan’s policies were outweighed by those preferring a stronger Japan over battling in the currency wars. It’s important to note that also Switzerland is active on the exchange rate, much more than Japan.
While this was already expected according to the G-7 statement earlier in the week, the actual fact found the pair at low ground, and it is now riding back up.
A challenge of the 95 line cannot be ruled out next week, especially as Japan is expected to name the next governor of the BOJ. The list of candidates is already becoming short.
The next line of resistance is 93.75: Dollar/yen was capped under this line earlier in the week. A break above this line opens the road to the peak of 94.40. On the downside, 92.12 gives a backing to the 92.88 line.
For more, see the USD/JPY forecast.
The G-20 summit continues in Moscow, but the main forex-related theme is already behind us with the release of the communique. An even earlier hint about the move was given via a statement from the US treasury last week.
When will the world’s nation say enough is enough to Japan? Only if and when the BOJ brings forward its open ended bond buying program.Get the 5 most predictable currency pairs