Forex Marketz Daily Forex News – Fully Markets Update
The Bank of Japan (BOJ) released its Monetary Base Target for 2014 back on October 31. Today they are expanding this target. In other words they are increasing the annual Japanese Government Bond (JGB) purchase for the year. They are expanding their monetary base from ¥70 trillion in JGB purchases per year to ¥80 trillion. The vote was 5-4 to expand.
This is due to deteriorating economic conditions thanks to April’s sales tax hike implemented by Prime Minister Shinzo Abe. The CPI also came in lower than expected at 3.2 percent. We had expected it to grow at 3.3 percent. This might have had a hand in today’s increase of JGB purchases.
Let’s look at the 4 hour MT 4 USD/JPY chart below.
Right after the release the Yen imploded the USD/JPY shot well above the significant and psychologically important level of ¥110.00. The yen is now at a six year low versus the U.S. Dollar. At this point buyers are now eyeing the December 2007 high, and the next technical level of any significance at ¥114.59. We would now need a close back below ¥110 to change our bullish tone.
