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"It was inevitable that the yen regained all the losses made on easing expectations. Sure, the market was disappointed, but that does not mean the yen will keep gaining."
- FPG (based on CNBC)
Pair's Outlook
The FOMC statement had no effect on the USD/JPY currency pair yesterday, as the exchange rate remained relatively flat for the second day in a row. The BoJ statement today, however, had a devastating effect on the pair, strengthening the Yen and causing the pair to drop to the 109.00 major level, where the weekly S1 coincides with the monthly S2. This cluster is the final frontier before the Greenback falls back towards the 18-month low of 107.63. A disappointing US GDP reading today could provide sufficient impetus for such a drop, while a good reading is likely to contribute to a recovery, pushing the Buck above the 110.00 mark.
Traders' Sentiment
Today 74% of traders long positions, compared to 72% on Wednesday. At the same time, the share of buy orders slid from 70 to 48%.
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