Fears of possible Ebola outbreak in the US pushed investors to seek relative safety in the traditional haven currency—the Japanese Yen. Nevertheless, the Yen retreated versus the US Dollar at the end of last week, losing 0.95%, as the diverging monetary policy stance between the Federal Reserve and Bank of Japan continued to boost demand for the Greenback. The pair ended the trading week at 108.18, compared with traders' forecast of 107. The Bank of Japan is likely to stick to a expansionary monetary policy stance on signs that the economic recovery in the world's third biggest economy is faltering after a devastating sales tax hike in April. Japan's government downgraded its assessment of the economic outlook for the second consecutive month last week. This week traders will be closely watching data from Japan on retail sales, inflation and industrial production, while Friday's monetary policy announcement by the BoJ will also be in focus. From the US Dollar side, the FOMC statement will drive the market, as well as revised data on GDP and weekly report on initial jobless claims.
Ceasar87 believes that "since 2012 this pair is evolving upward and will not stop anytime soon. It is also currently one of the safest for long term investment pairs without the risk of sudden change." The USD/JPY pair is expected to continue its uptrend movement and fetch 109.54 on Friday, 31 October, with the majority (56.2%) of those who took part in Dukascopy survey sharing bullish view on the pair. "The current upside move appears incomplete in it's Elliot Wave structure. Another leg to the upside can show the pair retesting highs in the 110 area," Jignesh said. Nevertheless, there are currently 41% of long positions on the market, while 59% of traders are "short".