Friday October 4, 2013 is showing a change in forex rates for the USD/JPY. While the currency pair is not looking that great with its ups and downs, there is a definite trend to the USD/JPY in which the JPY rates are going lower. It is not unsurprising that the JPY would be favoured in the current situation; however, it seems to trade on a giant range rather than a true breakout trend to the yen’s favour. Asia’s session was not harmed by the announcement the Bank of Japan would not change its monetary policy at the moment.
Factors working on USD/JPY Forex Rates
Plenty of news items are hitting the stands and influencing investors. For Japan there is a certain worry of the yen continuing to appreciate in value. Japan is in a position where the yen needs to depreciate for better trade positions. The country works on a surplus, but a shrinking surplus means fewer exports are going out. Japan is in a situation that requires changes, but until the USA gets back on track they are not willing to make any monetary policy changes, which have helped USD/JPY forex rates continue to favour the yen.
Rates for the yen hit 98.72 more than a month ago, but on the first Friday of October 2013 rates have hit as low as 96.9450 for the day. Rates also seem to hover around 97.07 to 97.08 for the moment. The rates are bound to change, but there are definite indicators the market is not moving swiftly in favour of the yen or USD. Instead it is a range of trading as news continues to roll out that has an impact on forex rates.
Some of the changes to the day’s chart have been about reaction to the BOJ, but others are a direct result of USA news that continues to make trouble. Friday was expected to show non-farm payroll reports; however, with a partial government shut down this did not happen. The shutdown is also affecting how rates can move. The interesting aspect of the charts is that the announcement of the USA to launch a military strike on Syria had more of an impact than the shutdown has. The military launch announcement had investors running for the yen, no holds barred. The same thing is not happening just by looking at forex rates. You can see the yen is in favour, but there is profit taking on the rise in rates towards USD favour.
BOJ Government Announcements and Forex Rates
The BOJ policy meeting also stated that the Japanese economy is recovering at a decent pace. It is not quick, but the central bank feels the economy is on the right path. There may soon be a goal for inflation at 2 per cent, which is a proposed medium to long term goal. It may not happen as most did not support the idea. The JPY forex rates did not perform the same way against AUD or EUR, probably given better news in both these countries.