By the middle of Thursday's trading, the USD/JPY had reached the 112.00 level. Since the middle of Tuesday's flat trading, the pair had surged more than 2.25%.
The reasons for the surge were two sided. The US Dollar was gaining strength, as the US Dollar index had reached a historical high level. In the meantime, the Yen was losing value due to various fundamental reasons.
Japanese Yen Dropped 0.93%
During Wednesday, February 19, the Japanese Yen depreciated 0.93% or 103 pips against the US Dollar. Note that the Yen depreciated against other major currencies as well.
Analysts suggest that the Japanese Yen tumbled as the demand for it as for the safe-haven currency also decreased.
The Japanese economic growth is pressured by the decline of foreign visitors to the country due to the South Korean boycott and the coronavirus outbreak. Moreover, the Japanese financial organizations were forced to shut business operations in China due to the epidemics.
Economic CalendarThere are no more scheduled macroeconomic events this week that could impact the USD/JPY.
The report about the next week is set to be published in the second part of Thursday's GMT trading hours in the Fundamental Analysis section.
USD/JPY short-term daily review
On the hourly candle chart, all technical levels have been passed and the rate has no resistance. However, as the move is purely fundamental, the situation is not a surprise.In general, USD/JPY traders should watch the news flows, as currently new information is more important than technical indicators.
Hourly Chart
On the daily candle chart, the pair has passed the resistance trend line of the 2019 and 2020 high levels.
Meanwhile, the rate could bounce off the resistance of the 112.15 level, which stopped the rate's surge in March and April.
Daily chart
Since Tuesday, 72% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range 81% of pending orders were to sell and 19% were to buy.
Previously, the orders were 70% to sell on Wednesday.