General analysis USDJPY for 25.04.2022
Current Dynamics
Japanese and US finance ministers discussed the importance of maintaining previous commitments to support exchange rates. The Governor of the Bank of Japan stated of the necessity to continue monetary policy easing. Tokyo announced the sale of 5 million barrels of oil from the country’s strategic reserves.
Against the background of a sharp depreciation of the yen, a meeting was held between the Minister of Finance of Japan Suzuki Shun’ichi and U.S. Treasury Secretary Janet Yellen. Ministers of the two countries during a meeting in Washington discussed the financial markets development, including the currency market. Major economies of the G7 agreed that the exchange rate is determined by the market and that excessive exchange rate volatility can have negative consequences for the economy and financial stability. Against this backdrop, the two ministers stressed the importance of keeping previous G7 and G20 commitments on exchange rates.
Meanwhile, the Governor of the Bank of Japan said that economic conditions in Japan and the U.S. are very different, and the Bank of Japan should continue its current monetary policy. At the same time Kuroda said that Japan’s economy is not so fragile that additional monetary policy easing is required. However, the Japanese government is considering an additional budget as part of efforts to strengthen the economy.
It’s worth mentioning the airline’s All Nippon Airways has reported a 145 billion yen ($1.13 billion) loss for the period from April 2021 to March 2022, while the forecast was for a 100 billion yen ($776 million) loss. The airline has recorded a loss for the second year in a row.
Meanwhile, Tokyo announced a tender for the sale of 5 million barrels of oil from its strategic reserves as part of measures to stabilize energy prices. The Japanese Minister of Economy, Trade and Industry said that the tender for the sale of national stocks of oil announced in the framework of cooperation with the International Energy Agency. Let’s remind that Japan has committed to release a total of 15 million barrels as part of the deal with the IEA.
Japan Corporate Services Price Index (CSPI) came out today at 1.3% and was better than 1.2% forecast. Tomorrow at 01:30 (GMT+2) data on Japan’s joblessness to job seekers ratio will be released. At the same time at 01:30 (GMT+2), Japan’s unemployment data will be released. Unemployment is expected to remain unchanged at 2.7%. Later in the day, at 07:00 (GMT+2), the Bank of Japan will publish the Core Consumer Price Index (CPI). Also later in the day, at 14:30 (GMT+2), data regarding U.S. Core Durable Goods Orders will be released. At 16:00 (GMT +2) there will be data on U.S. New Home Sales.
Support and resistance levels.
USD/JPY is consolidating above the key level of 76.4 Fibonacci. After the RSI Oscillator crossed the 70 level from the top to the bottom, its value remained above the 50 level.
- Support levels: 128.35, 127.70, 127.20, 126.70, 126.10, 125.05
- Resistance levels: 132.05, 130.25, 129.35
Trading scenarios
- Short positions can be opened below the level of 128.35 with the target of 126.70 and stop-loss 128.90 Implementation period: 2-4 days
- Long positions can be opened above the level of 129.35 with the target of 130.25 and stop-loss 128.90 Implementation period: 2-4 days