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USD/JPY breaks above 112.00

FXStreet (Córdoba) - USD/JPY continued to advance at a firm pace at the beginning of the New York session and broke above the 112.00 level, refreshing its 7-year high.

USD/JPY soared Friday after the Bank of Japan surprised markets by announcing further stimulus measures, two days after the Federal Reserve sounded more hawkish. Diverging policies have been supporting the pair over the last months, but today’s BoJ announcement gave it a strong boost.

USD/JPY has risen more than 300 pips throughout the day and reached its highest level since December 2007 at 102.14. At time of writing, the pair is trading at 102.05, recording a 6.55% gain on the day.

USD/JPY technical outlook

“Technically, the 1 and 4 hours charts shows extreme overbought reading coming from technical indicators, yet price posts higher highs without looking back, far from suggesting exhaustion or a trend change”, said Valeria Bednarik, chief analyst at FXStreet. “Trading at levels not seen since 2007, the pair is not known for its ability of making pullbacks: once a trend starts, it doesn’t look back: some steady consolidation above 112.00 should favor further advances, although extreme cautious is recommended at this point”.

Wall Street to open higher

The US Equity markets are likely to open higher today after the Bank of Japan announced a surprise expansion of its monetary stimulus earlier today, which triggered a “risk-on”rally in the stock markets across the globe.
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