Forex Analysis: Japanese Yen To Look Past BoJ- December Election In Focus

RELATED QUOTES

SymbolPriceChange
USDJPY=X103.3550+0.379
GBPJPY=X135.8040+1.108
EURJPY=X115.3220+0.587

Japanese_Yen_To_Look_Past_BoJ_December_Election_In_Focus_body_Picture_1.png, Forex Analysis: Japanese Yen To Look Past BoJ- December Election In Focus

Fundamental Forecast for Japanese Yen: Bullish

The Japanese Yen tumbled lower ahead of the Bank of Japan (BoJ) interest rate decision, with the USDJPY jumping to a fresh monthly high of 81.45, but the dollar-yen remains poised for a near-term correction as the low-yielding currency becomes increasingly oversold. After expanding its asset purchase program by JPY 11T in October, the BoJ is widely expected to maintain its current policy next week, but we should see the central bank continue to embark on its easing cycle as it struggles to achieve the 1% target for inflation.

Indeed, threats of a political shift in Japan dampens the outlook for the Yen as opposition leader Shinzo Abe, the main challenger against Prime Minister Yoshihiko Noda, calls on the BoJ to pursue ‘unlimited monetary easing’ and floats the idea of altering the central bank’s mandate to include specific fundamental targets. As the government continues to lean on the central bank and looks for increased cooperation, BoJ Governor Masaaki Shirakawa certainly faces an uphill battle in preserving the central bank’s independence, and we may see renewed bets for a currency intervention as Japan’s Cabinet Office lowers its fundamental assessment for the fourth consecutive month.

As lawmakers continue to warn of the ’adverse effects of deflation on the economy,’ we should the BoJ expand its balance sheet further over the coming months, but the central bank may have to take a more aggressive approach the region faces a heightening risk of slipping back into recession. However, as positive real interest rates in Japan makes the Yen appealing in the low-yielding environment, the headline-driven moves in the exchange rate may quickly fizzle out, and we may see the USD/JPY continue to give back the sharp rally as it appears to be overbought.

As the relative strength index on the USD/JPY approaches the 70 figure, the technical indicator certainly foreshadows a near-term correction in the exchange rate, and we may see the pair carve out a near-term top ahead of December as there appears to be a bearish divergence in the oscillator. Nevertheless, we should see interim support around the 50.0% Fibonacci retracement from the 2011 high to low (80.50), but we may see the pair fall all the way back to the 38.2% Fib (79.30-40) as the low-yielding environment is likely to persist in the following year. - DS

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • AP Newsbreak: Ritz's office backed app deal without bidding
    AP Newsbreak: Ritz's office backed app deal without bidding Associated Press - 14 minutes ago

    Indiana schools Superintendent Glenda Ritz's office approved a lucrative technology contract that state government officials said should have been subject to competitive bid, awarding it to a company that ... … More »

  • Business Highlights Associated Press - 25 minutes ago

    ___ Historic commercial flight from US lands in Cuba The first commercial flight between the United States and Cuba in more than a half century landed Wednesday, re-establishing regular air service severed ... … More »

  • France's Orange says in talks with Iran's MCI on potential cooperation
    France's Orange says in talks with Iran's MCI on potential cooperation Reuters - 26 minutes ago

    French telecoms operator Orange is in negotiations with Mobile Telecommunication Company of Iran (MCI), the country's largest mobile operator, "regarding a number of areas of potential cooperation and business topics," a spokesman said. The … More »

  • BP OKs Whiting refinery Tier 3 hydrotreater Reuters - 30 minutes ago

    BP Plc's (BP.L) 413,500 barrel per day (bpd) Whiting, Indiana refinery has received corporate approval to build a new hydrotreater to meet Tier 3 gasoline standards that will be required by the U.S. Environmental Protection Agency, according to a … More »

  • WeChat Chatter Fuels China Money Exodus Into Hong Kong Policies Bloomberg - 50 minutes ago

    Forget about restrictions imposed by mainland regulators trying to halt the exodus of billions of yuan out of China and into Hong Kong policy purchases. For Hong Kong part-time agent Wen, who declined to give her first name, it’s been that easy to … More »

  • Italy and Germany signal tougher EU stance on migrants
    Italy and Germany signal tougher EU stance on migrants AFP News - 50 minutes ago

    Italian Prime Minister Matteo Renzi and German Chancellor Angela Merkel agreed Wednesday to step up efforts to send migrants with no right to asylum in Europe back to their homelands. "All of us in Europe must work for the repatriation of those who … More »

  • Energy drags Wall St lower; S&P down slightly in August
    Energy drags Wall St lower; S&P down slightly in August Reuters - 52 minutes ago

    Stocks ended lower on Wall Street on Wednesday, as energy shares tracked oil prices lower, and the S&P posted a loss for August, the first negative month for the benchmark index since February. The Nasdaq gained 1 percent in August and the S&P shed … More »

  • How the Dow Jones industrial average fared on Wednesday Associated Press - 55 minutes ago

    U.S. stocks took small losses Wednesday as energy companies fell with the price of oil and chemical and materials companies traded lower. That pulled the market lower for August, ending a five-month winning ... … More »

  • Salesforce third-quarter revenue forecast misses estimates
    Salesforce third-quarter revenue forecast misses estimates Reuters - 56 minutes ago

    (Reuters) - Cloud software maker Salesforce.com Inc (CRM.N) forecast third-quarter revenue below estimates after it reported a 25 percent jump in quarterly revenue as customers stepped up purchases of ... … More »

  • H&R Block and Brown-Forman tumble, Chico's FAS rises Associated Press - 56 minutes ago

    Stocks that moved substantially or traded heavily on Wednesday: H&R Block Inc., down $2.54 to $21.66 The tax preparer reported a bigger first-quarter loss and less revenue than analysts expected. Brown-Forman ... … More »

  • Oil Rout Sends Stocks Slumping as S&P 500 Erases August Advance Bloomberg - 1 hour 1 minute ago

    Energy producers dragged down equities as crude fell below $45 a barrel after a report showed U.S. stockpiles climbed by more than projected. Brazil’s real rose as Dilma Rousseff was impeached, paving the way for a shift in economic policy after … More »

  • US stocks fall, dragged down by sinking oil prices AFP - 1 hour 9 minutes ago

    US stocks fell modestly Wednesday, pulled down by sinking oil prices, closing out a sluggish August which saw the S&P 500 score its first monthly loss since February. At the close the Dow Jones Industrial ... … More »

  • Infoblox reports 4Q loss Associated Press - 1 hour 12 minutes ago

    On a per-share basis, the Santa Clara, California-based company said it had a loss of 18 cents. Earnings, adjusted for one-time gains and costs, came to 8 cents per share. The results exceeded Wall Street ... … More »

  • Cloud management company Box's quarterly revenue jumps 30 percent Reuters - 1 hour 31 minutes ago

    (Reuters) - Cloud management company Box Inc's (BOX.N) quarterly revenue jumped 30.3 percent as the company added customers. Its net loss narrowed to $38.1 million, or 30 cents per share, in the second ... … More »

  • Salesforce.com tops Street 2Q forecasts Associated Press - 1 hour 34 minutes ago

    The San Francisco-based company said it had profit of 33 cents per share. Earnings, adjusted for one-time gains and costs, were 24 cents per share. The results beat Wall Street expectations. The average ... … More »

  • Shoe Carnival posts 2Q profit Associated Press - 1 hour 36 minutes ago

    On a per-share basis, the Evansville, Indiana-based company said it had profit of 22 cents. The footwear retailer posted revenue of $231.9 million in the period. Shoe Carnival expects full-year earnings ... … More »

  • Markets Right Now: Stocks edge lower on Wall Street Associated Press - 1 hour 38 minutes ago

    The latest on developments in global financial markets (all times local): 4:00 p.m. Stocks are closing out their first losing month since February as a quiet summer continues on Wall Street. A thin batch ... … More »

  • Ireland says Apple CEO spoke to PM, committed to stay
    Ireland says Apple CEO spoke to PM, committed to stay Reuters - 1 hour 42 minutes ago

    Irish Prime Minister Enda Kenny spoke to Apple (AAPL.O) chief executive Tim Cook ahead of the European Union's announcement of a 13 billion euro (11.04 billion pounds) back tax bill and the U.S. firm committed to remain in Ireland, Kenny's office … More »

  • US stocks slip as lower oil prices sink energy companies
    US stocks slip as lower oil prices sink energy companies Associated Press - 1 hour 56 minutes ago

    U.S. stocks are down slightly in afternoon trading Wednesday as energy companies fall with the price of oil and makers of chemicals and other materials take losses. Stocks are on track for their first ... … More »

  • Feds: Company tied to polygamous group used child labor Associated Press - 1 hour 57 minutes ago

    Federal labor lawyers have filed another child labor case against a Utah-based company tied to a polygamous group alleging underage laborers were put to work for long hours for little pay in dangerous ... … More »

  • Grain lower, livestock mixed Associated Press - 2 hours 16 minutes ago

    Grain futures were lower Wednesday on the Chicago Board of Trade. Wheat for Sept. fell 2.25 cents at $3.61 a bushel; Sept. corn lost 2.50 cents to 3.015 a bushel; Sept. oats was off .75 cent at $1.61 a ... … More »

  • Oil tumbles on U.S. inventory builds; best month since April
    Oil tumbles on U.S. inventory builds; best month since April Reuters - 2 hours 29 minutes ago

    Oil prices fell 3 percent or more on Wednesday, paring their big gains for August, after government data showed a large surprise weekly build in U.S. crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline. Crude futures … More »

  • Oil dives on bearish US inventory report AFP - 2 hours 32 minutes ago

    Oil futures on Wednesday fell for the third day in a row as official US figures showed an unexpected rise in crude inventories. In New York, a barrel of West Texas Intermediate for October delivery fell ... … More »

  • Are store rewards programs worthwhile?
    Are store rewards programs worthwhile? Associated Press - 3 hours ago

    You grab the gallon of milk you forgot yesterday, pick up the cheapest toothpaste, and head over to the checkout line. Just when your quick trip to the grocery store is almost over, the employee at the ... … More »

  • Turkey denies truce with Syrian Kurds despite lull
    Turkey denies truce with Syrian Kurds despite lull AFP News - 3 hours ago

    Turkey on Wednesday denied a US claim it had agreed a truce with a Kurdish militia targeted as part of its week-old intervention in Syria but Turkish-backed fighters confirmed a lull in the fighting. In an unprecedented operation, Turkey sent tanks … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.119-0.004-3.25%
    N21.SI
    0.36+0.01+1.41%
    E5H.SI
    0.9950.0000.00%
    Y92.SI
    4.02-0.08-1.95%
    Z74.SI
    0.22-0.02-6.38%
    5ME.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.285+0.035+14.00%
    5SY.SI
    0.60+0.07+13.21%
    BKB.SI
    0.23+0.03+12.20%
    I06.SI
    0.50+0.05+11.11%
    BFK.SI
    0.67+0.05+8.06%
    5CP.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.305-0.060-16.44%
    BQO.SI
    0.105-0.020-16.00%
    578.SI
    0.181-0.019-9.50%
    P36.SI
    0.21-0.02-6.67%
    1A4.SI
    0.22-0.02-6.38%
    5ME.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3622-0.0016-0.12%
    USDSGD=X
    1.51960.000.00%
    EURSGD=X
    1.7897+0.0063+0.35%
    GBPSGD=X
    75.8170+0.359+0.48%
    SGDJPY=X
    5.6916+0.0068+0.12%
    SGDHKD=X
    2.9896+0.0184+0.62%
    SGDMYR=X
    9,766.6553+6.6406+0.07%
    SGDIDR=X
    4.9015+0.0046+0.09%
    SGDCNY=X
    1.0237-0.0007-0.07%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,311.80-4.70-0.36%
    GCZ16.CMX
    18.64+0.06+0.31%
    SIU16.CMX
    90.17-1.67-1.82%
    ^XAU
    2.070.00+0.07%
    HGU16.CMX
    44.86-1.49-3.21%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.180.00
    ^FVX
    1.570.00
    ^TNX
    2.230.00
    ^TYX