It’s a big day in the Japanese economic calendar as the market looks poised to focus on what the Bank of Japan has to say in there monetary policy statement for the year. On top of this the Prime Minister Shinzo Abe is likely to further extend support for Japanese firms that were affected by the Brexit in the short term. With all of this it’s hard not to be hopeful for something from Japan, however, in this case I feel that we won’t see any of the previous fireworks as people had previously hoped. This can easily be seen on the charts as the market continues to show less and less movement in the USDJPY at this stage. The Bank of Japan has been the one holding the breaks in the short term, and that is because the previous rhetoric has worn off in the markets, and only real proactive stimulus is likely to be positive for the market. GDP figures from the start of this month for the previous quarter showed little movement at 0.2% (0.0% exp), and for me it seems a case of the BoJ holding off until the US markets start to make a move and caused the USDJPY to spike again.

On the charts this can most certainly be seen when it comes to technical movements. So far the USDJPY has trended downwards in a bearish move as people feel less inclined to bet on the USD and have been keen to hold into the safety of the Yen. However, the BoJ meeting today has caused a pause in volatility and the market is now converging on both sides into a pennant pattern in anticipation of a breakout in the current market climate. Will the BoJ cause such an event? It would seem unlikely in the current climate. If the BoJ was positive for more stimulus we could see a jump in the USDJPY to resistance at 103.378, which could certainly spark the bears into action. If the BoJ continues on the current path it’s likely we will see a further dip to support at 101.387 and even 100.601 in the long run.

Lastly the NZD had a welcome boost today as the milk price forecasts from Fonterra received an increase of 50 cents pushing them well past the breakeven point in New Zealand. This will likely have a large roll over effect in the economy in the long as it is currently the second top export from New Zealand. However, the NZDUSD failed to break through strong resistance at 0.7319 with today’s market movements. I would imagine though that we could indeed see further pressure on the NZD with this news and a push through higher to resistance at 0.7375 is likely to be a real candidate for any future movements. Any dips lower are likely to hit the 50 day moving average which will be acting as dynamic support in the long run.