USD/JPY resists USD strength
By Elizaveta Belugina
USD/JPY traded sideways yesterday. This pair is most resistant to the resent USD strength than other pairs as Japanese companies are buying JPY ahead of the fiscal year-end on March 31. Today USD/JPY was also quiet during the Asian session as Japanese banks are closed because of the national holiday, though then the pair made a move down towards 102.00.
There will be a number of Fed speakers today at 17:45-22:30 GMT. Traders will be watching these speeches in hope the Fed’s officials clarify Chairwoman Yellen’s comments. Earlier this week Yellen made the market participants think that American central bank may start raising interest rates sooner than expected. In particular, she said that between the end of the stimulus and the first rate increase there will be a “considerable time” and even specified “around six months or that type of thing.” Today Fisher and others may try to persuade traders that these “6 months” don’t represent an official target, so nothing to worry about. This is potentially negative for USD/JPY in the short-term. However, it might be hard to undo what Yellen has done. In the long-term the difference in policy between the Federal Reserve and the Bank of Japan will become more important and we expect an ultimate move higher, out of the triangle seen on the daily chart.
Support for the greenback is at 101.90, 101.40/30 and 100.75. Resistance is at 102.70 and 103.15.
Chart. Daily USD/JPY