More traders are pricing in a potentially dovish successor to BOJ Governor Kuroda!
Will BOJ Governor speculations continue to weigh on JPY in the next trading sessions?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
WSJ: Crypto firm Paxos faces SEC lawsuit over Binance USD token
Prospect of Ueda as BOJ Governor rattles Japanese yen, Nikkei index
BusinessNZ: holiday season boosts New Zealand’s services sector from 52.0 to 54.5 in January
Asian shares steady, dollar gains ahead of U.S. inflation data
Oil falls on demand worry as Fed ‘make or break moment’ approaches
BOE MPC member Haskel: BOE should be “really, really careful” about high inflation becoming embedded
Swiss inflation accelerated from 3.1% to 3.3% y/y in January after jump in consumers’ power bills
European Commission lifts growth outlook for the Euro Area, projects slightly lower inflation
New Zealand’s food price index at 9:45 pm GMT
AU Westpac consumer sentiment at 11:30 pm GMT
Japan’s preliminary GDP at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/JPY
AUD/JPY 1-hour Forex Chart by TradingView
We don’t have a ton of top-tier reports scheduled for release but that’s okay because forex traders are pricing in plenty of other economic themes.
JPY, in particular, is being dropped like a hot potato as traders priced in the possibility of Kazuo Ueda succeeding Kuroda as the next Bank of Japan (BOJ) Governor.
Kueda – who recently said that BOJ’s current policy is appropriate and that monetary easing must carry on – is expected to be nominated this week and confirmed as early as February 27.
Yen traders who thought a change in BOJ leadership meant a tilt towards hawkishness gave “YOU WERE THE CHOSEN ONE” vibes and sold JPY across the board.
AUD/JPY busted out of a descending trend line resistance that also happened to line up with the 100 and 200 SMAs on the 1-hour time frame.
The pair is now trading about 100 pips higher from its Friday levels and the latest candlesticks haven’t hinted at bullish exhaustion.
How high can AUD/JPY fly? Stochastic is already signaling an “overbought” scenario but the SMAs look ready to turn higher.
If Japan’s advance GDP report scheduled during the Asian session supports extending BOJ’s dovish biases, then JPY could continue to fall against its major counterparts.
AUD/JPY can reach the 92.00 major inflection point and maybe even hit the 92.70 January highs with enough momentum.
What do you think?
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