{"id":20115,"date":"2022-06-07T16:02:46","date_gmt":"2022-06-07T08:02:46","guid":{"rendered":"https:\/\/www.phillipnova.com.sg\/?post_type=market_trends&p=20115"},"modified":"2022-06-07T18:49:55","modified_gmt":"2022-06-07T10:49:55","slug":"usdjpy-sets-a-fresh-20-year-high","status":"publish","type":"market_trends","link":"https:\/\/www.phillipnova.com.sg\/cn\/market_trends\/usdjpy-sets-a-fresh-20-year-high\/","title":{"rendered":"\u7f8e\u5143\u5151\u65e5\u5143\u521b\u4e0b 20 \u5e74\u65b0\u9ad8"},"content":{"rendered":"\n
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After retracing in a falling wedge throughout May, the USDJPY has staged a strong rebound and surpassed its May high at 131.342, continuing on the broader uptrend since January 2021. The rise in the pair is also in tandem with the recovering US Dollar Index (DXY) that gauges the strength of the greenback against a basket of rival currencies. The main theme driving this currency pair remains the increasingly diverging monetary policies between the US Federal Reserve and the Bank of Japan (BOJ), which favours the greenback against the Japanese yen.<\/p>\n\n\n\n

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Upbeat U.S. employment data<\/strong><\/strong><\/strong><\/strong><\/h4>\n\n\n\n
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One of the vital economic data that stirred volatility in the pair was the US Nonfarm Payroll (NFP) that was announced last Friday. Released by the US Bureau of Labor Statistics, the NFP presents the number of new jobs created during the previous month, for all non-agricultural businesses. In the month of May, the US added 390K new jobs. While it is lower than previous months figure at 436K, the figures outperformed market consensus of 325K.<\/p>\n\n\n\n

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The NFP data is highly scrutinised by forex traders due to its strong influence on the Fed\u2019s monetary policy decisions. A higher NFP would increase the odds of a hawkish Fed, hence increasing the value of the US Dollar, vice versa.<\/p>\n\n\n\n

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BOJ sticks to its dovish stance<\/strong><\/strong><\/strong><\/strong><\/h4>\n\n\n\n
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Amid global inflation and the hawkish shift in major central banks, the BOJ remains one of the most dovish central banks in the world. BOJ Governor Haruhiko Kuroda reiterated his dovish stance on Monday saying that monetary tightening is not a \u201csuitable\u201d measure at all for the BOJ as the domestic economy is still in the midst of a recovery from the COVID-19 pandemic. Kuroda said \u201cUnlike other central banks, the bank has not faced the trade-off between economic stability and price stability\u2026 [for] this reason, it is certainly possible for the bank to continue stimulating aggregate demand from the financial side.\u201d<\/p>\n\n\n\n

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A dovish central bank typically has a negative effect on its currency. Paired with an increasingly hawkish Fed, the widening yield spread between the two currencies has enticed funds flow away from Yen denominated assets, into the higher yielding US Dollar assets.<\/p>\n\n\n\n

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Technical Analysis<\/strong><\/h4>\n\n\n\n
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USDJPY continues to display its strong bullish trend. Towards end of May, the pair broke out of a month-long falling wedge after hitting the dynamic support of the 50 daily moving average. The bullish momentum is seen as USDJPY posted daily gains in seven out of the past eight trading days. Technical indicators like the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) echoes the bullish momentum of the pair.<\/p>\n\n\n\n

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Looking ahead, the next resistance lies around 135.19 (R1) that is the 2002 high for the pair. In the meantime, we do not rule out a potential pullback to retest support around 131.342 (S1). If the pair successfully retests S1 support, it would serve as a strong indication that prices are poised to retest 2002 high at R1.  <\/p>\n\n\n\n

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Key events to watch this week:<\/strong><\/p>\n<\/div>\n\n\n\n

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Tuesday, June 7<\/strong><\/strong><\/strong><\/p>\n\n\n\n

USD – HUSD – Goods and Services Trade Balance (Apr)<\/p>\n\n\n\n

Wednesday, June 8<\/strong><\/strong><\/strong><\/strong><\/p>\n\n\n\n

JPY – Current Account n.s.a.(Apr), Gross Domestic Product (QoQ)(Q1),   Gross Domestic Product Annualized(Q1)<\/p>\n\n\n\n

Thursday, June 9<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/p>\n\n\n\n

USD – Fed’s Bullard speech, Fed’s Beige Book, ADP Employment Change(May), Initial Jobless Claims(May 27), Nonfarm Productivity(Q1), Unit Labor Costs(Q1), Factory Orders (MoM)(Apr)<\/p>\n\n\n\n

Friday, June 10<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/p>\n\n\n\n

USD – Consumer Price Index (MoM)(YoY)(May), Consumer Price Index Core s.a(May), Consumer Price Index ex Food & Energy (MoM)(YoY)(May), Michigan Consumer Sentiment Index(Jun)<\/p>\n\n\n\n

Saturday, June 11<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/p>\n\n\n\n

USD – Monthly Budget Statement (May)<\/p>\n\n\n\n

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