Dollar-Yen Falls, Yen Buying Intensifies on Reports of BOJ Policy Adjustment【October 31, 2023】

Fundamental Analysis

• Yen buying intensifies in the late hours of Japan time due to BOJ policy adjustment reports.
• Attention is focused on today’s BOJ policy meeting results and the governor’s press conference.
• If there’s no policy change, a rapid rise in Dollar-Yen is possible.

USDJPY Technical Analysis

Analyzing the daily chart of the Dollar-Yen exchange rate. Currently, the market is reacting to the possibility of a BOJ policy adjustment, leading to an increase in yen buying. As a result, Dollar-Yen dropped to 148.80 JPY. On the technical side, it has broken below the 24MA, which is an important line that has shown reactions in the past. Furthermore, the baseline of the Ichimoku Kinko Hyo chart is also acting as a support line.

The RSI breaking below 57 is also significant. Going forward, it will be important to see if it breaks below 50.

Long-term interest rates are also on the rise, nearing the 1% cap. If the BOJ adjusts its policy, the Dollar-Yen could fall even further. On the other hand, if there is no policy adjustment, the market may be disappointed, leading to yen selling and a rise beyond 150 JPY. It’s essential to pay attention to the BOJ’s movements and the market’s reaction.

Day Trading Strategy (Hourly)

Analyzing the 1-hour chart of the Dollar-Yen exchange rate. Selling intensified in the early hours, breaking the range and declining in the late hours of Japan time. Today, the BOJ’s policy decision is the focus, especially the 15:30 press conference by Governor Kuroda, to which the market may react sensitively.

If there’s no policy adjustment, the Dollar-Yen could rise sharply, possibly depreciating the yen to 152 JPY. Conversely, with a policy adjustment, a rapid drop to 146.20 JPY can be anticipated.

In such circumstances, it is advisable for day traders to refrain from trading during Tokyo hours. After London hours, they would want to adapt to the market conditions flexibly.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

149.80 JPY – Yesterday’s noted price range
148.80 JPY – Previous support line

Market Sentiment

USDJPY　Sell: 65% Buy: 35%

Today’s Important Economic Indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.