Since January 2016, the key interest rate in Japan has become negative. During the meeting on January 26, 2016, the Bank of Japan made it negative for the first time, reducing it from 0.10% to -0.10%. And since then, at every meeting, the leaders of the Bank of Japan have declared the need to maintain a negative interest rate and the parameters of the current extra-soft monetary policy.
And now, when many of the world's largest central banks have begun a cycle of tightening their monetary policies, the Bank of Japan does not intend to deviate from its beliefs on this matter.
“It is advisable to maintain the current strong monetary easing to support the economy. Western central banks are normalizing policies, but Japan is not in that situation given its economy and price trends,” Kuroda said, commenting on the April 28 meeting of the Bank of Japan, where it reaffirmed its intention not to raise interest rates despite accelerating inflation.
“The continued positive upward trend in the yield of 10-year US bonds makes the dollar an attractive asset for investment, given the prospects for further tightening of the Fed's monetary policy. The dollar is also actively used as a defensive asset, winning back the advantage from such traditional defensive assets as gold, franc and yen - we noted in our today's "Fundamental Analysis".
In the current situation, short positions in USD/JPY can only be considered as part of a short-term correction.
At the time of writing this article, the USD/JPY pair is trading near 132.70, having slightly decreased from the local maximum of 133.00 reached during today's Asian trading session. The breakdown of this local resistance level will be a signal to increase long positions.
Support levels: 132.00, 131.30, 131.00, 129.75, 128.20, 127.10, 127.00
Resistance levels: 133.00, 134.00, 135.00, 136.00
*) See also “Technical analysis and trading recommendations” -> Telegram
**) Get no deposit StartUp bonus up to 1500.00 USD
***) Promotion in InstaForex "Happy deposit": do not miss the opportunity to get your $9000. Promotion Terms HERE!
Source: InstaForex
