The USDJPY consolidates its worst weekly loss since January, rebounding from a five-week low to 132.50 early Monday. In doing so, the yen pair follows the rise in US Treasury bond rates to start the important week on a stronger footing following a three-week losing run.
According to the BoJ Summary of Views, board members felt the necessity to continue ultra-loose monetary policy.
According to the most recent Bank of Japan (BoJ) Summary of Views, the board members recognized the need to keep ultra-easy monetary policy in place for the time being, even as some cautioned of the need to analyses its adverse consequences, such as worsening market functioning.
The announcement from Yomiuri that the Japanese government is planning steps worth two trillion yen to keep the economy from falling back into deflation might add to the USDJPY rally.
Credit Suisse transaction, drive rates up following last week’s steep drop.
Apart from the expected continuance of the BoJ’s ultra-easy monetary policy. News indicating global central banks’ collaborative attempts to bolster US Dollar liquidity. As well as the UBS-Credit Suisse merger, caused the USDJPY to rebound.
The Bank of Canada, the Bank of England, the Bank of Japan. The European Central Bank, the Federal Reserve, and the Swiss National Bank are all ready to make a joint announcement. steps to offer greater liquidity via standing US dollar liquidity swap line agreements.
On Sunday evening, Sky News broke the news of the UBS-Credit Suisse merger, claiming that UBS will pay 3 billion Swiss francs (£2.6 billion) to purchase Credit Suisse. UBS has agreed to accept up to 5 billion Swiss Francs (£4.4 billion) in losses. And both banks will have access to 100 billion Swiss Francs (£88.5 billion) in liquidity support.
The Fed’s response to the financial crisis becomes critical for clear direction.
US Federal Deposit Insurance Corporation (FDIC) stated that the deposits of Signature Bridge Bank will be taken by a subsidiary of New York Community Bancorporation.
Of these bets, S&P 500 Futures reversed the previous day’s losses, gaining 0.60% intraday. Going forward, bond market movements will be critical for USDJPY traders to monitor. The Federal Reserve’s (Fed) action will also be significant. It should be emphasized that the Fed is planning a 0.25% rate hike on Wednesday. But the rate increase isn’t critical because it’s already priced in. Equally crucial is the Fed’s perspective on the banking sector and the US economy. As well as the trajectory of future rate hikes.
USDJPY Technical Outlook
Quite apart from the recent rally. A daily close above the 50-day moving average (DMA) at 132.50 is required for USDJPY bulls to restore control. Until then, sellers of the Yen pair are keeping a watch on a nine-week-old upward-sloping support line near 130.40.
