Trading volatility: USD/JPY on BoJ rates

The Bank of Japan

Next week, the Bank of Japan will announce its decision on interest rates, and this could cause some ups and downs in the trading market. The person in charge of the Bank, Kazuo Ueda, might give us some clues or advice on what they are thinking, which is good because it shows they are being open and honest. The most recent data tells us that inflation, which is the general increase in prices, has slowed down a bit. In December, prices went up by 2.6%, compared to 2.8% in November. This might mean that the Bank has more freedom to reduce monetary stimulus, which is when they help the economy by putting more money into it. However, it doesn’t necessarily mean that policymakers will start being strict.

USD/JPY

Now, when it comes to the USD and the JPY, the USD has been getting stronger compared to the Japanese yen, which has been getting weaker. If the Bank of Japan doesn’t say that they will raise interest rates in April, which is the next chance they have to do it, then it’s likely that the dollar will keep getting stronger. On Monday, the Bank will give us a lot of information about the economy, so we’ll be able to understand it more completely. The idea that experts are recommending is to bet on the dollar getting stronger compared to the yen, with the goal of reaching a price of 150.

EUR/JPY

In a similar way, there could be a good opportunity to make money with the EUR and the JPY If the Japanese yen keeps getting weaker compared to both the euro and the U.S. dollar, then the price of one euro compared to the yen could reach 164.30, which is the highest it has been since November of last year. Traders should be prepared for some ups and downs when it comes to the Bank of Japan’s decision about interest rates on Tuesday morning.