BOJ Kuroda:
- consumer prices likely to rise, but this cost- push inflation seen weighing on economy longer-term
- nominal wages may rise significantly, but recent rise in energy, food prices could push down Japan's real wages
- premature to speak about exit from BOJs easy policy, including what to do with its ETF buying
- BOJ will continue to buy ETF as needed, as part of its monetary easing program
- In the event BOJ decides to reduce ETF holdings, it will do so in a way that minimizes be OJ's losses and causes of least disruption to markets.
The USDJPY has been a run to the upside with the price up 11 of the last 12 trading days helped by the rise in US rates and expectations from a program of tightenings (the Fed expects 7 rate rises of 25 basis points in 2022 - and it may go even higher). Today, Fed's Powell hinted toward the need for 50 basis points at the next meeting and potentially other meetings going forward.
The USDJPY price moved above 120.00 today which took the price to the highest level since February 3rd, 2016. The high price today reached 120.064. It currently trades at 119.912.
Looking at the 5 minute chart below, the price run-up today has seen a continuation of the upside momentum after consolidating for most of yesterday before the move higher into the NY close.
The move higher - and acceleration - in the Asian session has restarted the trend-like move. Stay above the 38.2 – 50% of the trend move higher today between 119.746 and 119.821, would keep the idea of a trend move intact for the day. So far the correction off the high has held the 38.2% retracement, which is good news for the buyers and not so good news for the sellers who are fighting the trend.
