Solid News

Bank of Japan to Test Digital Yen in April

3/2/2023 11:02 AM

The USD/JPY pair shows a slight increase, testing the level of 136.45 for a breakout. The instrument is still holding near the local highs of December 20; however, the "bulls" practically do not attempt to resume activity in the last few days.

The macroeconomic statistics released the day before did not provide significant support to the US currency. The S&P Global Manufacturing Index fell from 47.8 points to 47.3 points in February, beating analysts' neutral expectations, while the Institute for Supply Management's (ISM) Manufacturing PMI rose from 47.4 points to 47.7 points, which, however, fell short of the expected value of 48.0 points.

The yen is supported slightly by data from Japan, where the Consumer Confidence Index corrected in February from 31.0 points to 31.1 points, while analysts had expected it to decline to 30.5 points, and total Capital Spending in the fourth quarter of 2022 fell from 9.8% to 7.7%, well above the projected 2.8%. On Friday, February data on inflation will be published, as well as the Unemployment Rate for January and the Manufacturing PMI from Jibun Bank. The February Consumer Price Index in the Tokyo region, excluding Fresh Food prices, is expected to rise from 4.3% to 4.5%.

Bank of Japan Executive Director Shinichi Uchida announced the launch of central bank digital currency (CBDC) testing in April, which will deploy several test environments to explore various types of transactions with an electronic version of the national currency and integrate it into the financial system. At the second stage, the regulator plans to involve private institutions in testing in order to receive feedback from business representatives and improve the functionality of the CBDC. The head of the Payment and Settlement Systems Department of the Bank of Japan, Kazushige Kamiyama, who oversees the project, noted that the pilot program will last several years, and the digital analogue will eventually be able to become an effective addition to fiat funds, but not their replacement.

Bollinger Bands on the daily chart show a steady increase. The price range is narrowing, reflecting appearance of multi-directional dynamics in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic has been demonstrating flat dynamics for a long time, being located near the level of "80" and indicating the continuing risks of the dollar being overbought in the ultra-short term

Resistance levels: 136.50, 137.50, 138.50, 139.58. | Support levels: 135.57, 134.50, 133.61, 133.00.

Solid ECN Securities and it affiliates don't accept applications from Indonesia, Egypt, Australia, Bonaire, CuraƧao, East Timor, Liberia, Saipan, Russia, Sint Eustatius, Tahiti, Turkey, Guinea-Bissau, South Sudan and other restricted countries.
Copyright All Right Reserved 2023