USDJPY in the short term...

Last week the USDJPY market was very choppy since it totally ignores all economic data out of Japan. The economic situation in Japan is still not getting better, and the recovery will not be quick.

The previous week the USDJPY hit a new high at 92.10 (highest level since January 12^th). The main reason was the discount rate increase by the Fed, which might suggest the beginning of a wider change in monetary policy (at least that is how the market reacted to the news). However, the currency market was mostly influenced by decreased risk aversion on global markets due to equities increase.

No major macroeconomic data is expected to be released today. What can bring some attention is the publication of the BOJ’s monetary policy meeting minutes, which is a detailed record of the BOJ (Bank of Japan) policy Board’s meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates. The BOJ has not changed interest rates for a very long time and no sensational news or comments are expected this time.

From the technical analysis standpoint, the USDJPY was unable to break the resistance level at 92.00 (although it reached 92.10). The downward impulse can test 90.70 with 89.86 being the ultimate target. Breaking the resistance can push the market towards 93.75, assuming further stock market increases.