USD/JPY, GBP/JPY, and EUR/JPY Outlooks

Japanese Yen Price, Chart, and Analysis

• High importance data and events over the rest of the week will provide drivers.
• USD/JPY remains elevated and at levels last seen last November.
• GBP/JPY and EUR/JPY topping out or more to come?

If you are looking at three of the most popular Japanese Yen-pairs, USD/JPY, GBP/JPY, and EUR/JPY, the economic calendar is your friend this week with a host of high-importance data releases and events on tap. US and Japanese inflation prints, the latest Bank of England monetary policy decision, and testimony from Fed chair Powell will add extra volatility to markets already on the move.

Wednesday June 21

Thursday June 22

Friday June 23

For all market-moving data releases and economic events see the real-time DailyFX calendar

The recent push higher in USD/JPY has stalled in the past couple of sessions but may have room to move higher still. The pair may be in the early stages of making a bullish flag formation, which if completed would leave 144.00 vulnerable. Above here 145.93 comes into focus. However, these rarefied levels may soon prompt verbal intervention from the Bank of Japan (BoJ) who may look to calm down the Japanese Yen-bears’ actions. The BoJ may let the Yen weaken slightly further but in a more orderly fashion.

Bank of Japan (BoJ) – Foreign Exchange Market Intervention

USD/JPY Daily Price Chart – June 20, 2023

Retail Sentiment is Little Changed

Retail trader data shows 31.41% of traders are net-long with the ratio of traders short to long at 2.18 to 1.The number of traders net-long is 4.42% higher than yesterday and 2.07% lower than last week, while the number of traders net-short is 0.39% higher than yesterday and 4.04% higher than last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed USD/JPY trading bias.

GBP/JPY has been on a roll since breaking above a prior level of resistance (172.13) at the end of last month. The two monetary backdrops are completely different with the Bank of Japan remaining accommodative, while the Bank of England is expected to hike interest rates by at least 100 basis points in the coming months. This widening of the yield spread plays in the British Pound’s favor. The pair have made a short-term triple top just above 182 but the overall technical set-up still suggests further upside. GBP/JPY is near highs last seen in January 2015 so there is little up-to-date price data to help identify accurate levels of resistance. Two monthly highs from the end of 2015 at 186.35 and 188.81 may provide some help on the monthly chart.

GBP/JPY Monthly Price Chart – June 20, 2023

EUR/JPY is another interest-rate differential play with the ECB firmly in the hawkish camp and looking to push interest rates higher. Such is the recent widening, and expectations of further widening, of rates between the two currencies, that EUR/JPY now trades at highs last seen back in September 2008. Again the bias remains toward higher prices, with 159.65 as the first level of resistance, but a period of calm cannot be ruled out over the coming days., especially if the Bank of Japan voices its concerns.

EUR/JPY Monthly Price Chart – June 20, 2023

All charts via TradingView

What is your view on the Japanese Yen – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.