Throughout August, the USDJPY also made multiple attempts to break through the other key level at 107 however it has met stiff resistance on every occasion forcing it lower. After trading in a very narrow range right around the key 107 level in late July, the USDJPY then went on a rollercoaster ride as it fell sharply to a then five month low near 104 before rallying strongly back to resistance at 107.
In late June the USDJPY moved through the key 107 level to a three week high before slowly easing back towards 107 where it is found some support. This level has now reversed roles providing stiff resistance to the USDJPY. Interestingly, the USDJPY has spent considerable time trading around the 107 level and has often seemed content to settle around it. In early June the USDJPY moved sharply dropping from above the key 109 level and two month high down through the popular range and back below the key 107 level to a one month low, after having previously surged higher through 109. For several months, the 107 level supported the currency pair well pushing it back towards 108 and 109 repeatedly, before the recent drop lower.
Throughout May to July, the USDJPY traded back and forth between 107 and 109 after having dropped sharply from a one month high around 111.50, and these levels are likely to continue to play a role should the USDJPY rally again. Through the middle of March, the USDJPY surged higher to regain lots of lost ground moving up from lows near 101 back up to the 111.50 range. The most significant move of late is when the USDJPY fell from a 12 month high above 112 down to a three year low near 101 in short time.
In a sign that the Japanese economy might just be clawing itself out of the depths of the economic damage caused by the coronavirus pandemic, a key Bank of Japan (BOJ) business survey has showed that sentiment has improved in the last quarter after an 11 year low in the previous quarter. Backing this up is a recent quarterly Sakura report from the central bank that advises that the BOJ has upgraded its assessments of eight out of nine regional economies, with indications of an increase in production and exports. The BOJ noted that economic conditions remained “severe,” however many regions reported that their economies “had started to pick up or shown signs of a pickup” as economic activities returned. Whilst BOJ Governor Haruhiko Kuroda has said that the economy is on a path to recovery, he added “the pace will be modest due to the lingering impact of global coronavirus infections.” In the report, it was noted that a transport equipment company told the central bank, “We expect a modest rebound in auto-related exports,” with a specific mention that the Chinese market had recovered stronger than expected.
The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.