The Japanese Yen (JPY) is trading flat against the US Dollar (USD) and consolidating in an incredibly tight range as market participants await Friday’s industrial production data, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
JPY is staying quiet for now
« Political developments are in focus as markets assess the ruling party’s LDP leadership race. Former Foreign Minister Motegi has offered his candidacy and commented on the BoJ, suggesting that the central bank should continue with normalization. »
« The BoJ’s next meeting is on September 19 and recent media reports have suggested that policymakers will seek to prepare markets for a hike before year end. »
« For USD/JPY, Tuesday’s recovery delivered a bullish hammer candle and a return to the technically important 50 day MA (147.52). Momentum is marginally bearish with an RSI just below 50, and we remain longer term bears. »