JPY Currency Pair 2015
The JPY quotations: the second best dynamic against the USD
The future of the yen in 2015 depends on what will happen this week: the currency will either complete the 4th consecutive year with decline, or demonstrate the best dynamics among the major currencies at year-end. The decline in the Japanese yen against the dollar by 0.6% was the smallest annual movement since 1992, when the quotes grown by 0.3%.
Each of the past three years ended for the yen quotations with decline against the dollar of 11% and lower. The divergence of monetary policy, which served as the driver of the yen quotations declined by 36% since the end of 2011, began to shrink after the Bank of Japan refused to extend the stimulus measures this year.
Traders expect that Fed will raise rates only two times next year. If Japanese currency strengthens above 120 per dollar, the growth may continue until the USD / JPY currency pair 2015 reaches the 15th of October highs around 118.07.
The EUR / JPY currency pair 2015 in a daily chart reached the goal of the first compound with the downtrend. In the coming week, we expect the development of the consolidation range around the 131.91 level. Further we will consider the development of another downtrend structure to the level of 129.25 as the main scenario. The goal is local. Next, the fourth wave is going to return to the level of 133.10.
The Citi Bank experts expect increased volatility in the AUD/JPY against this background and recommend selling the pair from area of 86.60. It is recommended to put take profit on 84.10, and stop-order (closing position with a loss) on 88.20.
The GBP / JPY currency pair 2015 in a daily chart reached the goal for the expansion of the downward consolidation range. The structure stretching opens up the potential for testing the level of 178.30. The upcoming week we will consider the possibility of correction with the test level of 183.50 from below. Then again the decline to reach this goal will occur.
The program of monetary stimulus of the Bank of Japan today underwent an unpredictable change. The main aspect is that the basis of the program had no changes. It is true for the amount of conventional program and also for the goal of the aggregate purchases amount.
Changes affected the purchases of government bonds of Japan (JGB), Japan Real Estate Investment Trusts (J-REIT) and shares. The Bank of Japan will expand the monetary base by 80 trillion yen (656 million dollars) per year, according to its plan, but the structure of purchases will be changed.
The Bank of Japan also increased its purchases amount in stock market, adding the approximately 300 billion yen per year of securities purchases to the planned targets. The expansion is aimed at securities purchases of companies that invest in physical (plant and equipment) and human capital.
When will the sale of shares bought under previous initiatives start, sales volume will correspond to approximately 300 billion yen per year, according to estimates of market prices for November of 2015. Changes also affected the deadline for the sale of these shares: the Bank of Japan has set it at March of 2026. It must be noticed that the deadline previously was set at September of 2021.