The Yen strengthened Tuesday morning as the BOJ decision was released.
As many expected, the Bank of Japan said it would implement a 2% inflation target.
They said something else though. Something pretty crazy. According to Market Watch, the BOJ said it would introduce open-ended monetary easing. Does that sound familiar to the U.S. Quantitative Easing? Also known as: QEternity.
This is exactly what Abe would like to see – to weaken the Yen long-term.
Forex trading saw a strong Yen Tuesday morning in result of the news. This is the weekly chart below.
Ultimately, as investors are aware of, the Yen strength will ideally not continue. The open-ended easing is giving an opportunity to weaken the Yen and that is what Shinzo Abe would like to see.
I tend to think we will see a lot weaker of a Yen by April. It’s very possible that investors will jump back in long on the USDJPY this week.
Winner’s Edge Trading, as seen on: