Every reason traders can’t ignore the yen this week
The Bank of Japan (BoJ) will hold its first policy meeting of the year next week, with markets pricing in a 90% likelihood of a rate hike on January 24.
Last year, BoJ rate hikes contributed to the Yen carry trade unwind in early August, coinciding with Bitcoin’s decline to $49,000.
This week, the Japanese yen strengthened toward 155.5 per dollar, its highest level in four weeks, driving prices to range lows and suggesting potential further downside. A daily close below the 20-day EMA has brought the 50-day EMA and the monthly pivot point into focus.
One potential hurdle for a rate hike could stem from US political developments. Former U.S. President Donald Trump is set to begin his second term in office on Monday, with expectations of executive orders that may disrupt financial markets.
Additionally, traders must contend with Japan’s Finance Minister this week reaffirming the government’s readiness to take "appropriate action" to support the yen.
Last year, BoJ rate hikes contributed to the Yen carry trade unwind in early August, coinciding with Bitcoin’s decline to $49,000.
This week, the Japanese yen strengthened toward 155.5 per dollar, its highest level in four weeks, driving prices to range lows and suggesting potential further downside. A daily close below the 20-day EMA has brought the 50-day EMA and the monthly pivot point into focus.
One potential hurdle for a rate hike could stem from US political developments. Former U.S. President Donald Trump is set to begin his second term in office on Monday, with expectations of executive orders that may disrupt financial markets.
Additionally, traders must contend with Japan’s Finance Minister this week reaffirming the government’s readiness to take "appropriate action" to support the yen.
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