Forex: USD/JPY turns weekly candlestick to “red”

After reaching as high as 94.06 after news that BoJ Governor Shirakawa announced his decision to leave office earlier than expected, the USD/JPY is threatening to do the long expected correction lower. Reports that Japan PM Shinzo Abe is finding resistance in his quest to act agressively in both fiscal and monetary policies.

“Abe's desire for much bolder monetary easing is reportedly meeting resistance from inside the MoF, the BoJ, and even within his own cabinet, on fears that radical easing could unsettle the JGB market”, wrote UBS analyst Gareth Berry.
Japan's Eco Watchers Survey points to a higher outlook, from 51.0 to 56.5 in January, and better than expected current situation, from 45.8 to 49.5 (consensus of 48.0).

The USD/JPY daily range widened to more than 150 pips and has reached 92.17 low, so far. By breaching below 92.78, the market is now trading lower on the week. The sharpest weekly drop since the 2nd week of November 2012.

“I think today the price may return to the level of 93.50. If later the market renews the minimum of this impulse, the price may start another descending structure”, wrote Roboforex.com analyst Igor Sayadov, adding that if the market renews the maximum, the pair may continue growing up towards the level of 95.15.