Will the JPY take a break?

Will the JPY take a break?

2019-11-11 • Updated

It is not a news the JPY is considered as a safe haven during the periods of uncertainty. The latest high-risk aversion and weakness across most of the global equity indexes motivated investors to buy the Japanese yen, which made it the best-performing currency in October. However, the global economic outlook and the trade tensions between the US and China may affect the JPY strength.

Let’s look at how the key currencies are trading against the JPY.


As you may know, the US dollar, as well as the Japanese yen, is considered a safe haven during the market turbulence. However, high volatility of the USD increased uncertainties among the investors and made the JPY stronger. 

For now, the price for the pair is mostly driven by the situation on the US equity market. The levels of the S&P 500 futures index which represents the market fears of the global risks, shows a correlation with the price of USD/JPY. On Wednesday, the fall in the stocks during the American session increased the risk-off sentiment among the investors. It weakened the USD and made USD/JPY to fall below the pivot support at 112.291 and to test the next support at 112.08 (50-day MA) on a daily chart.

On Thursday the index increased by nearly 20%. At the same time, USD/JPY rose above the 112.291 level targeting the resistance at 112.970. However, the high equity market volatility and the global economic picture added uncertainties for the future direction of the price. As a result, on Friday the price tested the support at 112.080.


In a short-term period, analysts predict the bearish momentum for the pair referring to the daily MACD, which is moving lower to its median line.

As we can see on a daily chart, the pair is trading in a range-bound market since the middle of October. The further direction of the price depends on the external factors which can occur in near future. The most significant events for the JPY this week is the Bank of Japan (BOJ) press conference on Wednesday. Analysts predict the BOJ Governor Mr. Kuroda to change the tone of the monetary policy to hawkish. On the other hand, the week is full of important releases for the USD. The level of CB consumer confidence – one of the leading indicators of consumer spending – will be published on Tuesday. On Friday we expect the non-farm employment change (NFP) and the unemployment rate. We will see how the actual data will affect the greenback.

If the JPY is supported by hawkish BOJ statement or the sell-off in the equity markets continues, JPY/USD can fall below the support at 111.366 to the next support at 110.386. Positive news for the USD will help the pair rise above the resistance at 112.130 to the next resistance at 113.190.


The pair has been falling since the release of the Italian budget deficit in September and a drop in the European equity market. In addition, the current uncertainties around the future of Angela Merkel as a German chancellor added negative sentiment among the investors. The bearish momentum can continue to develop with the daily MACD trending below its median line. If the EUR extends falls, the pair will move to the next support at 124.890. If the European stocks gain or the proposal on the Italian budget is suggested, the pair will rise above the resistance at 127.870 to the next resistance at 129.444 (100-day MA).



The British pound, in its turn, suffers from the unsolved Northern Ireland border backstop. Hawkish comments during the monetary policy report by the bank of England on Thursday can support the GBP.   

If bearish momentum develops, the pair can fall below the support at 142.580. Otherwise, the pair can go upwards crossing the resistance at 143.717 to the next resistance at 145.677.


To conclude with, the direction of the price for the Japanese yen is connected with a lot of external factors in the global market. Therefore, the situation on the equity market and the anticipated rate hike by the Fed in December are at the spotlight for the JPY traders.


Latest news

US100: Has the correction ended?
US100: Has the correction ended?

Bullish Scenario: Buys above 17910 with TP:18098.07, TP2:18277, and TP3: 18415 Bearish Scenario: Sells below 17850 with TP1:17730, TP2: 17700

Stocks To Watch For March
Stocks To Watch For March

During his program on CNBC on February 28, Jim Cramer expressed frustration with the impact of earnings reports on market behavior, noting how they often prompt rash decisions by average investors. He criticized the short-term focus and lack of attention to nuance in news coverage of earnings. Cramer cited examples of Home Depot and Lowe's, highlighting how investors reacted hastily to headline news without considering the broader context provided in earnings calls.

Nasdaq, S&P 500 Reach Record Highs
Nasdaq, S&P 500 Reach Record Highs

After creating record highs, Wall Street's main indexes opened on Wednesday and began to edge lower, reflecting cautious sentiment among investors. They're eagerly awaiting crucial inflation data that could impact the U.S. Federal Reserve's interest rate decisions. The upcoming release of the personal consumption expenditures (PCE) price index is expected...

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera