How Far Can USD/JPY Fall?
July 16, 2010
The U.S. dollar fell to a 7 month low against the Japanese Yen this morning following another barrage of weak economic data. Consumer prices fell, foreign inflows decreased and the UMich consumer confidence survey dropped to the lowest level since August 2009. On FX360.com, I talked incessantly in my daily report about how the data today was going to be weak and yesterday, I said USD/JPY was going to fall to at least 87. However now that it has broken below that point, the burning question on everyone’s minds is How Much Further Can it Fall?
My updated target is at least 85.00 - The currency pair’s 14 year low. When USD/JPY reaches that point, expect Bank of Japan officials to cry uncle and attempt to talk down the Yen (and up the dollar). That will most likely create some 2 way risk in USD/JPY and stem the currency’s slide. Yesterday, Shirakawa already warned that they are watching USD/JPY closely.
Enjoy the chart, enjoy the trade.
Posted in 2009 japanese yen, 2009 japanese yen forecast, 2009 us dollar forecast, ECB, Japanese Yen, forex blog, usd/jpy, usd/jpy intervention
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July 16th, 2010 at 1:37 pm
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i am ARUM BENJAMIN CHUKWUKERE
AZIZUS INTERNATIONAL BUREAU DE CHANGE LIMITED
July 16th, 2010 at 2:01 pm
Hi Kathy,
Japan seems to be very quiet with this new PM. And conflicting views on China growth and risk to growth is confusing me. I think the USD/JPY testing these levels might have something to do with this. Would political instability in Japan cause the yen to lose its status as a safe haven currency eventually? What are your views on this?
July 17th, 2010 at 6:27 am
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July 18th, 2010 at 12:04 pm
How effective do you think the BOJ can be? Thats a huge down trend! Great posts!
July 19th, 2010 at 5:24 am
After BoJ’s verbal intervention today and the reaction of the market perhaps USD/JPY will cease falling.
July 19th, 2010 at 7:26 am
@ JPY Forex Fan:
What did they say? I can’t find anything - and I thought that today was a bank holiday in Japan (The Nikkei was closed today).
July 20th, 2010 at 2:40 pm
Cheers.
Kathy, what do you think of the recent JGB vs UST movement versus USD/JPY? I find their recent correlation a bit awkward. What are the key things you would be looking at here?