USDJPY Long on PBOC move

USDJPY, H1               

Interesting news overnight and a sign of the times; China’s central bank sends tightening signal by lifting short term rtes. The first trading day after the long New Year holiday started with a bank in China as the bank lifted rates on open market operation repos by 10 basis points, effective today. Another signal that authorities are focusing on trying to control a real estate bubble, but some see it also as a way to try and halt the depreciation of the yuan, even if the rate rise focuses on reverse repos. According to Reuters two sources said authorities also raised the lending rates on its standing lending facility (SFL) short term loans.

The USDJPY has continued to trade with volatility, rallying back above 113.00 from a two-month low at 112.05 in the latest phase. An abatement in risk aversion in global markets aided the pair higher during the New York session yesterday, and while stock markets in Asia have come back under pressures (Chinese markets, open for the first time in a week after the lunar new year break, took a tumble), the BoJ today conducted its first operation to buy 10-year JGBs, which drove Japanese yields sharply lower. Also in the mix of market drivers is expectations for a strong U.S. payrolls report following strong ADP employment data and a solid ISM jobs component.  The 1 hour chart looks bullish over 113.00 and a LONG position was taken with a target of 30 pips.


Click here to access the HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our latest webinar and get analysis and trading ideas combined with better understanding on how markets work.

Click HERE to register the next webinar will start in:

Stuart Cowell

Senior Market Analyst


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.