USD/JPY – BOJ Kuroda Unfazed By Low Capital Spending
Mingze Wu | Dec 02, 2013 01:10AM ET
Hourly Chart
However, this is not a popular opinion, as we've seen USD/JPY trading higher slowly but surely in 2H 2013 despite the success of Abenomics being questioned all this while. It seems that most of the traders actually believe that BOJ and Shinzo Abe will simply introduce even more stimulus in order to achieve what they want, and that has and will continue to keep USD/JPY supported moving forward.
From a technical perspective, prices may also find support from Channel Bottom. Stochastic readings may be pointing down within a bearish cycle, but Stoch curve may similarly find support around the 30-40.0 levels (where previous trough has been seen). Hence it would not be surprising if we see both Stoch and price rebounding higher from here and usher in a push towards Channel Top once again.
Weekly Chart
Of greater concern is the long-term bullish potential for USD/JPY. Prices are currently trading around the ceiling of 2013 between 102.5 - 103.75 with Stochastic indicator suggesting that bullish momentum may peak soon. As a large part of current rally has been driven by hopes for additional BOJ Stimulus in December, there is a huge downside risk lurking around should BOJ disappoints. In this regard, Kuroda's response today is interesting - the BOJ Governor said that he expects gradual increase in Japan capital spending in respond to the weaker than expected numbers released earlier. We could be over reading, but the tone suggest that BOJ may actually be comfortable with current pace of economic recovery (even though numbers are lower than what market expects). This would imply that a better than expected stimulus package in December may be less likely - increasing the downside risk of USD/JPY further.
Get The News You Want
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.