|

Currency market: GBP/JPY, USD/JPY and BOJ

Japan Call Rates trade today -0.019 and last week traded -0.008 to -0.013. The weekly range traded -0.001 to today's -0.019. For the past 6 days, Call Rates traded from, 0.92 lows to 0.9920. or 7 points. Call rates rose since Tuesday April 12th.

The BOJ interest rates assisted to USD/JPY rise. In comparison to USD and Fed rates, every rise to Call Rates trades exactly 4 pips higher to USD/JPY. From this very basic to interest and exchange rates, the BOJ added a minimum of 28 pips today and much more to take this story to its conclusion.

A higher USD/JPY is a positive to exports but import prices suffer such as much required OIL for the Japanese economy to function.

If the BOJ raised headline interest rates to -0.15 from -0.10 then USD/JPY is added 300 pips higher to targets from 138 to current 135. At 135 is not necessarily an exchange rate that trades but it serves as the top rate in relation to interest rates.

The BOJ's solution to exchange rates if a concern exists is to lower headline for a drop to USD/JPY. The best approach is eliminate negative interest rates and go positive. USD/JPY would stop dead in its tracks to further rises and drop like a rock as positive interest rates works perfectly to Fed rates and would normalize USD/JPY again.

Japan's real GDP turned positive for the past 2 quarters at 1.6 and 1.3 but negative from January 2021 to January 2019. Real GDP in Japan hasn't achieved a 2 handle since 2014.

Meanwhile the gang that can't ever shoot straight applied Yield Control, stimulus, Inflation targets then raises daily interest rates to allow USD/JPY to rise.

To understand the Dr.'s of destruction that we call the BOJ, view all past economic experiments from the BOJ since the 1900's. Every experiment and every economic road was a complete and total failure. The BOJ is to dangerous to be called a central bank and apply central banking nor should they be trusted.

USD/JPY above big breaks 128.33, 129.21, 130.10, 130.98, 131.87. Recall yesterday's 9 year cycle from 90.00 to 120. The next cycle is expected down and the first target is 120.00's.

GBP/JPY at 168 and 169 targets is close. The trend began at 147.00's and GBP/JPY rose 2000 pips. The first drop to USD/JPY and GBP/JPY will hit hard and fast.

Author

Brian Twomey

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

More from Brian Twomey
Share:

Editor's Picks

EUR/USD holds near 1.1900 ahead of US data

EUR/USD struggles to build on Monday's gains and fluctuates near 1.1900 on Tuesday. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD declines toward 1.3650 on renewed USD strength

GBP/USD stays on the back foot and declines to the 1.3650 region on Tuesday. The negative shift seen in risk mood helps the US Dollar (USD) gather strength and makes it difficult for the pair to find a foothold. The immediate focus is now on the US Retail Sales data. 

Gold stabilizes above $5,000 ahead of US data

Gold enters a consolidation phase after posting strong gains on Monday but stays above the $5,000 psychological mark and the daily swing low. US Treasury bond yields continue to edge lower on news of Chinese regulators advising financial institutions to curb holdings of US Treasuries, helping XAU/USD hold its its ground.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.