At the latest Bank of Japan meeting it was decided that there is no need for any additional economical stimulation as the situation is steadily improving. However, since the decision was made prior to “Brexit” and a consequent dip in Yen’s price, this week the attention of traders is going to turn to the report on Inflation.
If the Inflation levels turn out to be higher than expected, it will likely strengthen the Yen.
“Brexit” had a massive impact on majority of foreign exchange assets. Due to the fact that Japanese Yen is one of top safe-haven assets, during the uncertain periods traders tend to buy either JPY or gold. Japanese Yen has significantly strengthened against USD and even psychologically important level = 100 yen/dollar was broken for a short period of time.
There was a downward trend on USDJPY D1 chart and the results of “Brexit” only strengthened it (indicator of technical analysis “Awesome Oscillator” proves it). Starting from 2016 Japanese Yen strengthened almost by 20%. If such political uncertainties will continue it will have a positive impact on JPY, because lots of investors will reallocate their assets in order to avoid any risks.
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