Japanese Yen Analysis 16-06-2020

The US dollar fluctuated in a narrow range tilted to the upside during the Asian session to witness its bounce to the fourth session from the lowest since May 11 against the Japanese yen following the decisions and directions of the Japanese central bank and on the threshold of the upcoming press conference of the Governor of the Bank of Japan Haruhiko Kuroda and the expected economic developments and data on Tuesday. By the US economy, which includes the semi-annual testimony of Federal Reserve Governor Jerome Powell before Congress about monetary policy and in light of renewed market fears of a second wave of corona.
 
At exactly 06:14 am GMT, the US dollar pair rose against the Japanese yen by 0.14% to 107.48 levels compared to the opening levels at 107.33 after the pair achieved its highest level during the trading session at 107.64, while achieving the lowest at 107.23.
 
We have followed the decision of the monetary policy makers at the Japanese Central Bank at the June 16 meeting, which was held for one day as a precautionary measure against the spread of the Corona virus, to keep the short-term reference interest rates negative at 0.10%, which came in line with expectations, with Also, remain committed to directing the yield of 10-year government bonds at zero.
 
The Bank of Japan disclosed the monetary policy statement through which monetary policy makers touched on the fact that the uncertainty is very high regarding the impact of the Corona virus on the economy amid the statement that the economy faces a difficult challenge and that private consumption has declined extensively, with the assurance that they will take additional steps to facilitate cash without Hesitate if necessary and focus on the effects caused by the coronavirus.
 
It is noteworthy that the Japanese central bank adopted in the previous emergency meeting on the 22nd of last May, more stimulus with the launch of a new lending program in which it aims to direct more money to small and medium-sized companies that suffer from the economic blow to the spread of the coronary virus epidemic, while also benefiting it. At the time, he had extended the deadline for a series of recent actions he had taken to combat the consequences of the Coronavirus.
 
The Bank of Japan also announced last month to accelerate purchases of corporate debt of six months to the end of the current fiscal year on March 31, 2021, and this comes in the wake of the Bank of Japan raising at the meeting in April last, the maximum purchase of corporate bonds and securities Trade, which he pledges to buy to 20 trillion yen from 7 trillion yen previously.
 
We would like to point out that the BoJ also confirmed in April its commitment to purchase unlimited amounts of government bonds by canceling the previous purchase guidance 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 from Government bonds without setting a higher limit, so that the yield of 10-year bonds remains at about zero percent.
 
On the other hand, investors are currently awaiting by the US economy the disclosure of the retail sales reading, which represents about half of consumer spending, which represents more than two-thirds of the gross domestic product of the United States, which may reflect a rise of 7.9% against the worst ever, a decline of 16.4% last April. Also, the substantial reading of the same index may show an increase of 5.5% compared to the worst ever, a decline of 17.2%.
 
This comes in conjunction with the disclosure of industrial sector data for the largest industrialized country in the world with the release of the industrial production index, which may reflect an increase of 3.0% compared to 11.2% in April, while a reading of the energy utilization index may show an acceleration of growth to 66.8% compared to 64.9% in April, before we witnessed the release of the final reading of the wholesale stocks index, which may show the widening decline to 0.8% compared to 0.2% last March.
 
To the testimony of Federal Reserve Governor Jerome Powell about the semi-annual report of the Federal Reserve monetary policy before the Senate Banking Committee via satellite, before we witness the speech of the Deputy Governor of the Federal Reserve and member of the Federal Open Market Committee Richard Clarida about economic expectations and monetary policy at the annual dinner of the Assembly Foreign policy in Washington is also via satellite.
 
Other than that, we followed this week's report that touched upon the fact that the administration of President Donald Trump was considering stimulus plans worth $ 2 trillion to spend on infrastructure in the United States, and that came before we saw the Federal Reserve announcing the detailed plans to purchase individual corporate bonds This stimulated investor appetite for risk in the financial markets by supporting US monetary and fiscal stimulus plans.
 
We would like to point out that the recent monetary and financial stimulus adopted by governments and global central banks has reduced in one way or another the market’s concern about the negative effects of the outbreak of a second wave of coronavirus, especially after China recently announced the registration of new cases of coronavirus and the Chinese authorities recently re- Closing restrictions are being imposed again in some neighborhoods of Beijing.

Technical analysis

  
The dollar versus yen pair is showing some bullish tendency now to test the pivotal resistance 107.68, and we notice that the EMA50 meets this level to add more strength to it, enhancing the chances of the continuation of the expected bearish direction over the intraday basis, which targets 106.44 initially.
 
From here, the downside scenario will remain intact during the upcoming sessions unless 107.68 is breached and a daily close remains above it.
 
The expected trading range for today is MY