Forex Today: Bank of Japan Sends Yen Tumbling

The Bank of Japan announces it will maintain its current monetary policy, sending the Yen about 2% lower against the US Dollar.

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The yen is a popular asset during turbulent times.
  1. In its monthly policy release, the Bank of Japan confounded some analysts’ hopes for a change in policy, announcing that it will maintain its interest rate, 10-year yield target of about 0%, yield curve control, and variable bond purchases. The result was a sharp fall in the Yen of more than 2% against the US Dollar, and strong falls against most other currencies. The USD/JPY currency pair traded as high as ¥131.57 following the release. As there is a long-term bearish trend in this currency pair, there is a significant possibility this pullback may reverse quickly.
  2. The long-term bullish trend in precious metals such as Gold and Silver as well as the Euro in the Forex market, remains valid. These assets are attractive to long-term trend traders in the long direction right now, as higher prices here are likely over the coming days.
  3. In the Forex market, the US Dollar has continued to make minor gains, contrary to the long-term bearish trend in the greenback.
  4. Canadian CPI (inflation) data released yesterday came in as expected, showing a strong month-on-month decline of 0.6%.
  5. The US Empire State Manufacturing Index data release yesterday came in worse than expected,
  6. There will be releases today of British CPI data, and US PPI data. This could cause volatility in the British Pound and even the Euro as a secondary effect.
  7. Daily confirmed new global coronavirus cases decreased last week for the fourth consecutive week, but there are serious doubts over the veracity of China’s official statistics, which almost certainly dramatically understate new coronavirus cases.
  8. Total confirmed new coronavirus cases worldwide stand at over 671.9 million with an average case fatality rate of 1.00%. 
  9. The rate of new coronavirus infections appears to now be significantly increasing only in Japan and China.

 

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

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