After reaching 15 week highs against the US dollar and the euro, signs point towards a reversal for the yen should the Bank of Japan intervene to control inflation levels. Even as Governor for the BOJ Haruhiko Kuroda has stayed his hand on expanding easement policies, technical analysis of the currency trend suggest that the yen is headed towards its previous subdued position.
There is pressure on the BOJ to enact policy to spark the stagnant consumer price growth to meet its 2% inflation target. Demand for the yen as a safe haven currency will continue to hold unless easement is introduced.
The yen approached but failed to break through its 200 day moving averages for the euro, dollar, and aussie could mean that it is presently overbought signaling the start of a decline. Although the yen gained in value in all of its major pairs except the Canadian dollar, analysts claim that it will float back down to numbers around the range of its September 2008 level of $107.
During last week’s trading sessions, the yen went through a period of falling only to rebound to close higher than where it opened. When plotted on a candlestick chart, this is known as a hammer pattern that predicts the USD/JPY currency pair to rise.
The yen is currently trading for $101.95 and €138.98 in the Tokyo market. Japan’s currency reached its 15-week peak in May 20 when it hit $101.33.
Other Japanese markets are enjoying highs as well. Shares of Topix are on track to increase for a 5th straight day at 1,198.65 as of mid afternoon, opening up the possibility of closing on its highest price level in nearly 2 months, while the Nikkei is up to 14,691.13. These show increases of 0.3% and 0.4% for their respective index.
Construction company Shimizu Corp was leading on the Nikkei with a 5.60% improvement.
Japan recently enacted an increased sales tax for the first time since 1997, but its growth for this quarter is forecast to shrink the most since the 201 earthquake and tsunami disaster.
The material has been provided by InstaForex Company – www.instaforex.com
After reaching 15 week highs against the US dollar and the euro, signs point towards a reversal for the yen should the Bank of Japan intervene to control inflation levels. Even as Governor for the BOJ Haruhiko Kuroda has stayed his hand on expanding easement policies, technical analysis of the currency trend suggest that the yen is headed towards its previous subdued position.
There is pressure on the BOJ to enact policy to spark the stagnant consumer price growth to meet its 2% inflation target. Demand for the yen as a safe haven currency will continue to hold unless easement is introduced.
The yen approached but failed to break through its 200 day moving averages for the euro, dollar, and aussie could mean that it is presently overbought signaling the start of a decline. Although the yen gained in value in all of its major pairs except the Canadian dollar, analysts claim that it will float back down to numbers around the range of its September 2008 level of $107.
During last week’s trading sessions, the yen went through a period of falling only to rebound to close higher than where it opened. When plotted on a candlestick chart, this is known as a hammer pattern that predicts the USD/JPY currency pair to rise.
The yen is currently trading for $101.95 and €138.98 in the Tokyo market. Japan’s currency reached its 15-week peak in May 20 when it hit $101.33.
Other Japanese markets are enjoying highs as well. Shares of Topix are on track to increase for a 5th straight day at 1,198.65 as of mid afternoon, opening up the possibility of closing on its highest price level in nearly 2 months, while the Nikkei is up to 14,691.13. These show increases of 0.3% and 0.4% for their respective index.
Construction company Shimizu Corp was leading on the Nikkei with a 5.60% improvement.
Japan recently enacted an increased sales tax for the first time since 1997, but its growth for this quarter is forecast to shrink the most since the 201 earthquake and tsunami disaster.
The material has been provided by InstaForex Company – www.instaforex.com
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