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Bank of Japan intends to Stick to the Current Course of Monetary Policy

11/9/2022 11:12 AM

During the Asian session, the USD/JPY pair's dynamics are ambiguous, and it consolidates near 145.50 and local lows from October 27.

The US currency has been under pressure since the end of last week when a controversial report on the labor market was published, and investors again actively started talking about a possible easing of the US Federal Reserve's rhetoric. At the moment, the "bearish" activity in the dollar is decreasing ahead of the results of the midterm elections in the country, as well as against the backdrop of expectations for the publication of statistics on consumer inflation on Thursday: the currency may react positively to the victory of the Republicans, as they promise to pay more attention to domestic economic problems of the United States.

The macroeconomic statistics from Japan released on Wednesday do not significantly impact the dynamics of the trading instrument: the volume of bank lending in October rose by 2.7% after an increase of 2.3% last month against expectations of 2.5%. Eco Watchers current situation index increased from 48.4 points to 49.9 points, while analysts expected a decrease to 47.1 points, but the same agency's forecast for the same period fell from 49.2 points to 46 .4 points, contrary to the opinion of experts about the growth to 49.4 points.

In a summary of opinions published yesterday, the Bank of Japan stressed its commitment to the current monetary policy, which includes steps to slow inflation to the target value of 2.0%. Still, it noted the need to consider the impact of consumer price growth, which reached 3.0% in September for the first time in three decades, on the purchasing power of households, as companies prefer to pass their costs on to consumers. At the end of last month, the Japanese government presented a 199.0B dollars plan to help the population, including subsidizing utility bills and supplies of "black gold" to curb oil prices.

On the daily chart, Bollinger bands are moderately declining. The price range is expanding from below but not as fast as the "bearish" activity develops. MACD is falling, keeping a strong sell signal (the histogram is below the signal line). Stochastic shows similar dynamics but is close to its lows, indicating that the dollar may become oversold in the nearest time intervals.

Resistance levels: 146.00, 147.00, 148.27, 149.00. | Support levels: 145.00, 144.00, 143.51, 142.54.

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