JPY plunges against the dollar

The USD made a strong comeback against the JPY this week touching the three-week high at 90.81. Japan’s GDP grew by 0.9% in the current quarter against the last figure of 1.1%, which was below the market expectations. The U.S dollar gained because the jobless claims ,which decreased for the second consecutive week from 468K to 462K. Despite the 7.2 trillion Yen stimulus package that was introduced in December by the Japanese Government, consumer spending did not show any significant increase, which also contributed to the falling price of JPY against the USD . But Japanese’s corporations are still confident of the rebounding demand especially arising from Asian countries like China. However, there is speculation that the BOJ would add more funds to the financial system to the second largest economy suffering from deflation. Also, the government is open towards the option of currency intervention if the prices do move unexpectedly against the markets. The current recovery of the U.S is also building pressure on the Yen, which continues to plunge.

From the technical point of view the near term support would be at 90.29 with the next support at 89.89. From the upside 90.75 is the near term resistance and if it continues to appreciate the next resistance level is at 91.12. Other than the U.S macro news, the BOJ press conference would be important for investors trading on the Yen.
Mohammed Rabbani
Mohammed.rabbani@xtb.in
XTB India