Analyzed by: Mr. Naoto Arase, Head of Fintech of Golden FX Link Capital
The dollar-yen pair turned to a rebound from the low of 113.47, which was recorded on 1/24, and surged to 116.33 yesterday. From a technical point of view, Market was impressed with the strength of the formation, such as breaking through the Ichimoku Kinko Hyo turning line, the reference line, the Bollinger midband and the 21st moving average, and also lighting up and suggests a strong buying signal. It is becoming a chart shape to be observed as the uptrend.
Fundamental Analysis
From an fundamental point of view, (1) the US Bank of Japan's hawkish inclination observation (last week, the US dollar extinguishing remarks = the remarks that restrain the excessive weaving of the market, the US long-term interest rate decline → the flow of US dollar selling has strengthened. However, from last weekend to this week, the strong US January employment statistics and the US January consumer price index led to a sharp rise in US long-term interest rates → the flow of US dollar buying accelerated) and (2) the BOJ's long-term zero interest rate policy. (The Bank of Japan announced yesterday that the *"limit price operation" will be activated for the first time since July 2018), (3) Japan-US monetary policy disparity against the background of (1) and (2) above (US 10-year bond yield breaks through the psychological milestone of 2.00%) , It has risen to a high level for the first time in about two and a half years. On the other hand, Japan has a move to curb the rise in the JGB yield for 10 years by implementing a limit operation), and there are materials that are reminiscent of the continuation of the dollar appreciation and yen depreciation trend.
*The limit operation is that the BOJ buys government bonds from private financial institutions in principle at the specified yield----Still QE is continued
Conclusion for the daily analysis of USD/JPY on Feb 11
Based on the above, we will continue to anticipate the dollar-yen rise as the main scenario due to the widening of the nominal interest rate differential between Japan and the United States. But this is the short-term scenario up to May or late July.
Today's forecast range: 115.60-116.40
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