USD/JPY: forecast for Novemver 23-29
USD/JPY remains supported by the US yields, which, in turn, are higher on the expectations that the Federal Reserve will soon tighten its policy. The large speculators once again increased their net short positions on Japanese currency.
However, the pair lacks bullish drivers from Japan. Last week the Bank of Japan kept monetary policy unchanged. The regulator maintained the assessment that Japanese economy continued to recover moderately. Governor Kuroda dismissed contraction of the nation’s GDP saying it was caused not by weaker demand but by inventory adjustments. As a result, the prospects of further easing from the Bank of Japan were pushed further into future. This is the big factor limiting the yen’s decline.
This week the most important events in Japanese economic calendar will be the Bank of Japan’s meeting minutes on Wednesday and the nation’s inflation data on Friday.
Trading will likely remain broadly consolidative. Resistance is at 123.80, 124.15 and 125.00. Support is at 122.50, 122.00 and 121.80. Watch news from the US – Fed’s announcement on Monday, American GDP and consumer confidence on Tuesday and durable goods on Wednesday. We will be looking for the opportunities to open small longs on the improving data from the United States.