Upcoming Important Events
JPY- BOJ Monetary Policy Statement and Outlook Report
USD- Core PCE Price Index
Friday's main risk event for the Yen will be the Bank of Japan's inaugural policy meeting with Governor Kazuo Ueda at the helm. Although Japan's consumer inflation remains above the central bank's target, it is anticipated that the BoJ will leave interest rates at -0.1% and maintain its current yield-curve control settings.
Policymakers may exercise caution and avoid hasty decisions due to Japan's fragile recovery and ongoing uncertainty surrounding the overseas banking crisis. Nevertheless, any indication from Ueda suggesting a possible shift towards neutral forward guidance could pave the way for tighter policies and ultimately benefit the Yen.
From a technical standpoint, USDJPY has been converging into a triangle pattern and is primed for a breakout. For horizontal levels, the price is stuck between 134.600 and 130.800 for a couple of weeks now. The two major events happening on Friday are both impacting USDJPY and investors should stay cautious. We have no preference for its direction, but there is a higher possibility for an upside break since the Fed is expected to raise interest rates come May.
The pair has been creeping to the upside and it barely making it pass the 1.1000 key resistance level. No significant move has been made as the market eagerly awaits the ECB rate decision, FOMC Federal fund rate and also the NFP in the coming week.
If we have to make an educated guess based on the chart, there is a higher chance of the it testing the next resistance at 1.1760 due to the higher lows and higher highs made recently.