Markets Analysis

Fundamental Analysis

• U.S. stock indexes rise sharply; Meta and Amazon earnings beat market expectations
• Dollar-Yen Forms Modest Range Ahead of BOJ Policy Meeting
• No YCC revision by the BOJ would put upward pressure on the dollar/yen, and the pair may hit 135 yen.
• U.S. GDP slowdown but consumer spending suggests upward trend; inflation indicators beat expectations

Technical Analysis

The wait-and-see attitude is strong in the April month-end market. The BOJ policy meeting is scheduled for today, attracting market interest. Some overseas players are selling off heavily in anticipation of a policy change. Unless there is a surprise, the majority also believes that there will be no YCC change. Therefore, if today’s BOJ outlook and governor’s press conference indicate that monetary easing will continue for the time being, it will put upward pressure on the dollar-yen.

The euro and pound sterling are moving modestly, and the cross yen may move easily.

Dollar-Yen (USDJPY)

The dollar-yen is highly volatile depending on the outcome of the BOJ policy meeting. Most forecasters expect no change in the YCC, and the dollar/yen is expected to have room to rise. However, the 4-hour moving average is pointing down, and it is unlikely that the pair will break through JPY 135.00 anytime soon. Even if there is no change, the level will probably be a temporary breach into JPY 135.00.

JPY 134.40 is a relatively large resistance zone. If it is exceeded, the stop loss could be triggered and the price could plunge into the JPY 135 level.

NIKKEI225

The Nikkei 225 is sticking to the upper end of its range.

The major resistance zone is at JPY 28,800. If the YCC remains unchanged, it is likely to be a tailwind for Japanese stocks. If the market finds some relief, a break above the range will be just a matter of time. It will be interesting to see whether the market will break through the JPY 30,000 mark, which is a milestone.

The 240 moving average is pointing upward and is also functioning as a support band. From a medium- to long-term perspective, we believe the upward trend will continue.

NASDAQ

The NASDAQ market was significantly higher. The strong financial results of major high-tech companies were the main factor pushing stock prices higher. Strong earnings results are very positive in the U.S. amid high inflation and signs of an economic slowdown.

From a technical perspective, one upside target for the Nasdaq would be USD 13,270; a close above USD 13,270 would give impetus to the rally.

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.