JPY analysis – A BOJ possible move next week

It is difficult for the USD/JPY cross to reach the 103 level, while is still continuing the speculation over a possible move from the BOJ next week.

This morning we saw a little spike which led the price to 103.20 preceded by a drop mainly related to the news that the BOJ is about to bring the interest rate further in negative territory during the next week’s meeting.

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In addition, following a recent survey by Bloomberg, the majority of the economists see the BOJ extending his monetary stimulus program next week. More specifically the 53% see a further cut in the interest rate, while just the 35% predicted an increase in the government bond purchase.

Recent offers for the cross still continue to cap his movement, despite the recovery in the US treasury yields and the uncertainty on the major central bank’s monetary policy which are influencing the investors sentiment. At the moment the USD/JPY is traded positively of 0,38% at 102,95 and this morning we’ve seen a decrease on the industrial production figure, from -3,8% to -4,2%.

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Today the eyes of the market will be looking at likely movements on the global yields for the majors and for the RO-RO trend in order to anticipate further moves of the principal currencies. Main events for next week however will be the US retail sales and CPI data.

In terms of technical analysis, the first obstacle on the upside is seen for sure at 103,20 recently tested, but not broken, and which represent the six-days high. In case the cross would broke it we could assist to an upside move towards the 103,61 level.

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