As traders in the UK and the US return from the bank holiday, the markets have also woken up and greet them with a 100 pip rise in USD/JPY.
Since the big crash of May 23rd, the Nikkei index of the Japanese stock market and USD/JPY have been even more correlated than beforehand.
Dollar/yen started the week around 101, and was relaxed for a change. The Nikkei index managed to close 1.2% higher, at 14,311.98, and this certainly helped the yen fall. USD/JPY is now trading just under 102. On the way, the pair broke the veteran 101.44 line. The pair is now struggling with 102.
Further resistance appears at 102.80 which was a recent. The 103.73 peak was recorded just before the stock market crash, and it will probably have to wait for the Nikkei index to break the 15,000 level once again. Or, it depends on a big QE tapering hint from the US, something that is unlikely in the immediate future.
For more on the pair, see the Dollar yen forecast. Here is a live chart of the pair. The fresh leap can be easily seen:
new TradingView.widget({
“width”: 610,
“height”: 400,
“symbol”: “FX:USDJPY”,
“interval”: “60”,
“toolbar_bg”: “#E4E8EB”,
“hide_side_toolbar”: false,
“allow_symbol_change”: true
});
The levels of bond yields have been keeping BOJ officials awake at night. The Bank of Japan already made some immediate action to keep yields at low levels.
