The dollar extended its rally against the yen and reached a new 6-month high at 85.51.The Japanese yen is facing a strong selling storm that started 3 weeks ago, driving the yen down against all major currencies.
Japanese economic data has lost its capacity to influence the movement of the yen, as the selling pressure increased significantly on the Japanese currency; however, the Japanese central bank will hold its meeting this week, which could have a significant impact on the pair’s movement.
Government jobs report issued by the United States last Friday showed better than expected improvement, which increased expectations that the US Federal Reserve is going to raise interest rate and therefore the result was a huge sell-off for the Japanese currency against the greenback.
The Japanese central bank will announce its Interest rates decision which is expected to be set between the range of 0.0% and 0.10%, and incase of the BOJ’s intervention in the financial market through pumping more liquidity, there will be negative effect on the yen’s movement, thereby pushing it to decline against the dollar.
The US will announce data on the weekly initial Jobless claims, which had a previous reading of 388 thousands applications and expected retreat to 385 thousands applications, and with the presence of any improvement in the reading, the dollar’s movement will witness support against the yen.
Originally posted here
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