USD/JPY (current price: 108.73)
The Japanese Yen was the strongest major currency at the end of the week as traders are losing confidence in the Bank of Japan’s monetary policies. The central bank signaled the possibility of more stimulus measures earlier on the week. The limited effects of the already used negative interest rates and the QE raise doubts about future plans as well. The pair is trading in a narrow range after the strong rally that took it from 105.50 to 109.50 last week. Support is found near 107.50 with strong resistance ahead at 110.
Our assessment: The pair might re-test the lows near 105.50 in the coming weeks if risk assets continue lower and safe haven demand for the Yen returns.
