This week, we have BOJ Meeting. I think they will keep unchanged current monetary policy. April is the time of tax rate hike. BOJ needs to consider the reaction of consumer spending of Japanese toward tax hike before giving more stimulus as expectation of investors.
There are two possibilities:
- If Japanese consumers react negatively, they reduce spending, and U/J would fall down as a result, but it also increases the expectation of further stimulus from BOJ : U/J would be up despite of negative spending.
- If Japanese consumers react positive, they don’t reduce spending, and accept tax hike. The result would be : Nikkei 225 would react very positive, and transfer to U/J . U/J is up as a result.
In both cases, the bias of USDJPY still be bullish.
Look at on the chart, Nikkei225 chart. I show a key trend line. If Nikkei225 breaks this trend lines, this is the time to LONG USDJPY. Thus, to trade USDJPY this week, please be patient, wait until Nikkei 225 officially cross the trend lines, and focus the reaction of Japanese consumer reaction.
Good Luck.
There are two possibilities:
- If Japanese consumers react negatively, they reduce spending, and U/J would fall down as a result, but it also increases the expectation of further stimulus from BOJ : U/J would be up despite of negative spending.
- If Japanese consumers react positive, they don’t reduce spending, and accept tax hike. The result would be : Nikkei 225 would react very positive, and transfer to U/J . U/J is up as a result.
In both cases, the bias of USDJPY still be bullish.
Look at on the chart, Nikkei225 chart. I show a key trend line. If Nikkei225 breaks this trend lines, this is the time to LONG USDJPY. Thus, to trade USDJPY this week, please be patient, wait until Nikkei 225 officially cross the trend lines, and focus the reaction of Japanese consumer reaction.
Good Luck.