US Dollar Continues to Climb Against the Japanese Yen

US Dollar vs Japanese Yen Technical Analysis

As you can see on the chart, we did turn around a start rallying again against the Japanese yen via the US dollar. This is a strong uptrend and right now seems to be focusing on the ¥130 level. This is a large, round, psychologically significant figure, so it should not be a huge surprise that we have stalled a bit here. I think that short-term pullbacks will almost certainly be buying opportunities, given enough time.

The Bank of Japan continues to do everything it can to keep interest rates down, and that of course means buying bonds. By buying bonds, they are essentially starting to “print yen.” This is something that they have done for years, and make no bones about. In other words, they are not concerned about the value of the Japanese yen, lease not quite yet. They have made a few comments about it, but at this point still remain on the sidelines because they can either keep interest rates down or help boost the Japanese yen exchange rate. They do not have the luxury of doing both.

On the other side of the Pacific Ocean, we have the Federal Reserve. They have made it abundantly clear that they are raising rates multiple times between now and the end of summer, and at a clip of 50 basis points each. This of course is very bullish for the US dollar and bonds in general. This is a bit of a feedback loop that will almost certainly continue to punish the Japanese yen in the foreseeable future.

USD/JPY Price Forecast Video 06.05.22

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