USD/JPY (current price: 105.88)
The Japanese Yen continues to be strong ahead of the Bank of Japan’s meeting on Thursday. The central bank is running out of options in the fight against deflation, as the Yen is still the strongest currency among the majors. Inflation numbers are far away from the BOJ’s target of 2%, and the Japanese economy continues to grow very slowly. The pair has been trading in a declining trend since hitting 125 last year, and a move towards 100 seems more and more realistic in the coming months.
Our assessment: USD/JPY will likely test its prior low at 105.50 following two bearish weeks, as all eyes are on Mr. Kuroda and the BOJ this week.
