In November and well before Shinzo Abe announced the platform he would base his campaign for the Prime Minister role, dollar/yen (USD/JPY) traded as low as 79.06. The goal of reflating the economy and devaluating the Japanese yen was just what Japanese exporters wanted to hear.
RECENT ACTION
Now that Shinzo Abe won and his people are running the Bank of Japan (BOJ), the yen has pretty much had a one-way move towards last week’s high of 103.72. Last month, the central bank announced the goal of doubling its bond purchases. The overbought dollar yen may however is not having the same decisive breakouts after comments confirming the BOJ’s QE efforts.
NEW COMMENTS
Last night the Koichi Hamada, an advisor to Shinzo Abe said that BOJ can do more. This comment helped trigger a move towards the 102 region.
KEY LEVELS
If price action rallies towards the 102.55, which happens to be the 61.8% Fibonacci retracement level of last week’s high to low move, we may see a corrective move targeting the century level. If bullish momentum takes out 103.25, traders may see new highs and a test for 104.
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