Forex: USD/JPY sideways on Asian New Year

The USD/JPY has been trading sideways during the Asian session as most of the markets there were closed for New Year. With a spike low at 92.36 and a daily high at 92.75, the pair is currently quoting around 92.60.

This week, the BoJ meeting will be meeting for its policy decision. “The BoJ meeting itself is probably slightly less in focus as incumbent Shirakawa is approaching the final months of his tenure, but given the ongoing difficulties (not helped by translation woes) on discerning what the current Japanese government is thinking about the exchange rate, there may yet be some scope for surprises”, wrote UBS analyst Geoffrey Yu.

Commerzbank analysts now see the market as corrective, after meeting its target of 93.32/96 and started to ease lower last week. “The market is under pinned by the 20 day ma at 91.06 and the 2 month up channel at 90.47, while above here the market will remain immediately bid. This support is reinforced by the 88.64 4 month uptrend”, wrote analyst Karen Jones, pointing to near term resistance at 93.96/94.07, and then at 94.99 (2010 high) and 95.77 (March 2009 spike low).