As of October 20, 2022, the USD/JPY price has broken through 150 yen. Looking at the history of foreign exchange, currency pairs that have continued to move unilaterally for such a long period of time are rare. In the past, USD/JPY was called a stable currency pair, and it was not such a speculative move. That’s why some traders can’t win in USD/JPY.
A pair of US dollar and Japanese yen. This pair is traded around the world after EUR/USD, not only suggesting the health of the Asian economy, but also becoming one of the indicators of the global economy. It was a currency pair that is easy to recommend for beginners, and stability was a selling combination. However, in the 2020s, that sense of stability is about to be lost.
Market price after 2021
This is the market price as of October 2022. Looking at the weekly chart, there is no other market that has been in a one-sided trend for such a long period of time. The daily price movements were intense, and there were many days when the price moved more than 100 pips. Due to such a market price, it is no longer a currency pair that is very dangerous and recommended for beginners. It is reasonable to think that the market has already undergone a cataclysmic change and that the nature has changed fundamentally.
In the United States, inflation measures are being chased, and the dollar interest rate continues to rise. The Fed has hinted at future interest rate hikes, and the US dollar will continue to raise interest rates in stages. Therefore, the dollar is likely to appreciate further, and it is said that this trend will not change for the time being.
On the other hand, the Japanese yen has been undergoing large-scale monetary easing for a long time, and the policy will not change in the future. The governor of the Bank of Japan and the Japanese government have only said that they will be watching, and they are not planning to intervene, so it seems that the Japanese yen will continue to sell in the future.
Technical analysis doesn’t work
The one-sided selling of the Japanese yen and buying of the US dollar starting in 2021 is unlikely to subside in the future. Normally, in a phase, if the stock goes up significantly, it will drop once, but this is not the case at all when looking at the market from a broader perspective. It is a very rare market where the Japanese yen is sold unilaterally and the US dollar is bought.