Gold 1960,825
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EURUSD 1,1886
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DJIA 28551,50
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OIL.WTI 38,13
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DAX 12481,65
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The weak dollar has a very negative impact on the Japanese economy. The Japanese yen continues to strengthen and the usd/jpy pair reached its lowest level in 4 years. We saw these values in March during the market crash, but it only lasted a couple of days. Then the Japanese currency started weakening again.
USD/JPY
What should the Bank of Japan do?
The regulator is already printing yen, hoping to support the country’s export-oriented economy. And then a new problem is that the yen is at its 4-year high, which makes Japanese goods less competitive in the global market.
The level of 100 yen per dollar is considered critical and it is already very close. Close to it, the probability of currency interventions by the Bank of Japan will increase dramatically. Yes, we remember the times when currency interventions started from 80 yen to 1 US dollar. But now the situation has changed a lot.
Different night surprises may be awaiting usd/jpy in the near future.
What could become a movement trigger in the near future? The most important statistical data will be released in a week. We will know Japan’s GDP volume for the 3rd quarter of this year. If the figures turn out to be worse than expected again, the Japanese yen could rise sharply, which would force the Bank of Japan to intervene.
What can speculators bet on?
A good trading idea is to buy a dollar/yen pair in a range of 100-100.5 with stops below 100 yen for 1 US dollar. If the stops are not knocked down, there are 2 options. Or an intervention by the Bank of Japan and a quick profit taking. Or the market itself will turn from the most important level 100 and go up. In this case, it is possible to leave the longs for a medium-term period.
What awaits us today?
07.45 Unemployment rate in Switzerland for October
08.00 Trade balance in Germany for September
11.35 Address by Bailey, Head of the Bank of England
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