JPY crosses/USD/JPY

What’s the BOJ going to do, according to big investment bank analysts

After reading analysis from 3 investment banks I would suggest that the BOJ will do nothing. Contrary to reports in the Nikkei, all 3 analysts feel that the BOJ will maintain it’s present stance.

  • They may stress the slowdown in domestic, regional and global economies.
  • A downward revision of growth and inflation forecasts is also quite likely.
  • The Asset Purchase Program may possibly be expanded by up to JPY10 trillion and/or the time-frame could be extended.

It feels to me that the market is pricing in the latter, at the very least, so anything less will be a disappointment and would lead to some JPY short-covering.

  1. Sean, I am not sure whether you agree with this. Looks like this pair could go back to 77.50 if BOJ disappoints and even BOJ delivers something like 5-10 trillion expansion, 79.50 to 80.00 will be a hard resistance level. Maybe wait and see what BOJ will do???

  2. That’s a reasonable scenario Jason. I’m running a long position from yesterday but I’ve got a very tight stop below 7840 and I agree that anythg in high 79’s will be a very tough resistance level. By JPY short-covering I mean JPY buying ie USD/JPY selling so I think we are in agreement 🙂

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