USDJPY analysis 22.05.2020

The fluctuation of the US dollar in a narrow range slanted toward decline during the Asian session to witness its bounce for the second session in four sessions from its highest since April 13 against the Japanese yen after the developments and economic data that it adopted from the Japanese economy, which include the decisions and directions of the monetary policymakers at the bank The Japanese central bank and amid the scarcity of economic data today, Friday, by the US economy, the largest economy in the world.

At 06:03 am GMT, the US dollar pair fell against the Japanese yen by 0.15% to 107.45 levels compared to the opening levels at 107.61 after the pair achieved its lowest level during the trading session at 107.41, while it achieved the highest at 107.76.

On the Japanese economy, we followed the disclosure of inflation data with the release of the annual reading of the national consumer price index, which showed a slowdown in growth to 0.1% compared to 0.4% in March, while the annual reading of the same index excluding fresh food showed a contraction of 0.2% against a growth of 0.4%, Worse than expectations for a contraction of 0.1%, and the annual reading excluding energy and fresh food showed growth slowed to 0.2% versus 0.6%.

This came before we witnessed the decision of the monetary policymakers at the Bank of Japan at the May 22 emergency meeting, which was held for one day as a precautionary measure against the spread of the Coronavirus, to keep interest rates negative at 0.10%, which came in line with expectations, and that remains Also on the pledge to direct the 10-year government bond yield at zero, otherwise, Bank of Japan Governor Haruhiko Kuroda stated that the bank had not held a press conference.

In the same context, the Central Bank of Japan unveiled the monetary policy statement, which reflected the Bank of Japan's provision of further stimulus with the launch of a new lending program aimed at channeling more money to small and medium-sized companies suffering from the economic blow to the outbreak of the coronavirus, while stating that it has extended The deadline for a series of recent actions he has taken to combat the consequences of the Coronavirus.

The Bank of Japan also announced the acceleration of the debt purchases of companies with a six-month period until the end of the current fiscal year on March 31, 2021, with a statement that the response measures for the coronavirus have reached to date 75 trillion yen, and this comes in the wake of the Bank of Japan raising in Last April's meeting, the maximum purchase limit for corporate and commercial securities that it pledges to purchase is 20 trillion yen from 7 trillion yen previously.

It is reported that the Japanese Central Bank also confirmed last month its commitment to purchase unlimited amounts of government bonds by canceling the previous directive to purchase them at an annual rate of about 80 trillion yen, as the monetary policy statement included at that time a paragraph, "The Bank of Japan will purchase the necessary amounts of government bonds without Set a higher limit so that the yield of 10-year bonds remains at around zero percent.

Technical analysis

The dollar versus yen presented quiet positive trades yesterday to try to rise above 107.68 level, reinforcing expectations of the continuation of the bullish trend during the upcoming sessions, which is moving inside the bullish channel that appears in the picture, supported by the EMA50, waiting for the trend towards 109.22 as the next main station.

The stochastic is trying to get rid of its negative momentum to support the bullish expectations, which will remain intact, provided that it remains above 107.35.

The expected trading range for today is between 107.00 support and 108.60 resistance.

Expected trend for today: bullish.