How long will the yen (JPY) continue to depreciate?

While Japan’s economy is showing some signs of weakness but growing, Japan’s economic outlook is likely to recover from the impact of COVID-19, then supply constraints eased. Japan’s core consumer inflation is around 2%, besides, the uncertainty regarding to Japan’s economy till now is very high. Japan’s financial system must be wary of the overall impact of the stability of currency markets and its impact on the Japanese economy and prices, the BOJ will maintain a loose policy to achieve a stable 2% inflation target.

The BOJ is ready to ease further policy without hesitation in response to inflation, Japanese consumer is likely to accelerate the pace of growth, and Japanese financial situation is completely easing, expecting short-term and long-term policy rate targets to remain at current or low levels.

The US dollar policy trend continues to tighten and keep prices at a high level, thus maintaining fiscal policy and easing the inflation. For this month, on the 27th, there will be a further rate hike on the US dollar.

According to the technical analysis between the US dollar and the yen (USDJPY), there is a continuous increase in the chat that it is up trend (Up Trend) and there is no pattern shows the trend of the end of the uptrend yet.

For today, I encourage all investors to buy at 136.700, set profit to 137.500 and set risk to 135,500.

Analyzed by: Mr. Long Samnang Business Manager of PP Link Securities

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