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The Yen Wins Back the Llosses of the Past Day

1/19/2023 10:57 AM

The USD/JPY pair shows a moderate decline, correcting after an attempt of active growth the day before, when the US dollar rose to the opening levels on January 12, but then the "bulls" quickly lost the gained advantage.

The reason for the depreciation of the yen was the decision of the Bank of Japan to maintain the current monetary policy. In particular, the regulator did not change the yield curve control parameters, which could indicate an imminent tightening of monetary conditions up to an increase in the interest rate from the current -0.10%. At the last meeting, the Bank of Japan left the 10-year government bond yield corridor unchanged, which now ranges from -50.0 points to 50.0 points relative to the target of 0.0%. The Governor of the Bank of Japan, Haruhiko Kuroda, noted that adjustments are not yet required and the results of the measures already taken should be awaited. In addition, the regulator predicts consumer price growth in March to 3.0%, and, according to experts, the figure will drop to 1.6% next year, below the target value of 2.0%. Additional pressure on the yen was also exerted by data on the volume of Machinery Orders, presented the day before: in November, the number of such orders in annual terms decreased by 3.7% after an increase of 0.4%, while analysts expected an acceleration of positive dynamics to 2.4%, and in monthly terms it fell by 8.3% after an increase of 5.4% in October. In turn, Exports from Japan added 11.5% after increasing by 20.0%, while Imports slowed from 30.3% to 20.6%, which led to a decrease in the Trade Deficit from -2029.0 billion yen to -1448.5 billion yen.

Bollinger Bands in D1 chart demonstrate a moderate decrease: The price range is expanding, making way to new record lows for the "bears". MACD is trying to reverse upwards again keeping a previous very weak buy signal (located above the signal line). Stochastic is showing similar dynamics, retreating from its lows, but reacting to the recovery of "bearish" activity during the Asian session.

Resistance levels: 129.00, 130.00, 131.00, 132.00. | Support levels: 128.00, 127.00, 126.34, 125.60.

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