Japanese Yen: USD/JPY (JPY=X) – Surge in Demand for Risky Assets Sinks Japanese Yen
The Dollar/Yen is trading higher late Monday, helped by increased demand for risky assets and concerns that a jump in the number of coronavirus cases in Japan will do further damage to the already wounded economy. At 13:50 GMT, the USD/JPY is trading 109.060, up 0.591 or +0.55%.
Demand for Risk Surges as US Coronavirus Case Growth Rate Appears to Slow Down
U.S. equities jumped on Monday, rebounding from sharp losses in the previous week, as the number of new coronavirus cases in the U.S. appeared to slow down.
Early buyers were encouraged by data that shows a slowing in the number of daily U.S. coronavirus cases, although it is still early to determine a lasting trend.
The market was also boosted after the Trump administration noted on Sunday there are signs of stabilization in hospital rates, helping to lift Wall Street sentiment on Monday. Meanwhile, New York State reported 594 new coronavirus deaths on Sunday, fewer than 630 on Saturday, marking the first daily decline in coronavirus-related deaths, according to Governor Andrew Cuomo.
Slowing death rates in Europe also offered up some hope that the U.S. would be nearing its peak soon as well and that social distancing measures are working.
Japan to Declare Coronavirus Emergency
Japan is to impose a state of emergency in Tokyo and six other prefectures as early as Tuesday to contain the coronavirus, Reuters reported.
Domestic infections topped 4,000, Jiji news reported, and 93 have died – not a huge outbreak compared with some global hot spots. But the numbers keep rising, with particular alarm over the spread in Tokyo, which has more than 1,000 cases including 83 new ones on Monday, Reuters reported.
“Japan won’t, and doesn’t need, to take lockdown steps like those overseas,” Prime Minister Shinzo Abe told reporters, citing the opinion of infectious disease experts. “Trains will be running and supermarkets will be open. The state of emergency will allow us to strengthen current steps to prevent an increase in infections while ensuring that economic activity is sustained as much as possible,” he said.
An emergency, which Abe said would last about a month, will give governors authority to call on people to stay at home and businesses to close. With no penalties for ignoring the requests in most cases, enforcement will rely more on peer pressure and respect for authority, and was unlikely to be as rigorous as lockdowns in many other countries, according to Reuters.
Japan to Launch New Stimulus Measures
Abe also said the government will launch a stimulus package of about 108 trillion yen, including more than 6 trillion yen for cash payouts to households and small businesses and 26 trillion yen to allow deferred social security and tax payments.
It was not immediately clear how much of that package would be new government spending.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 112.33.
The projected lower bound is: 105.42.
The projected closing price is: 108.88.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 23 white candles and 25 black candles for a net of 2 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 86.3032. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 2 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 51.77. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 20 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -12. This is not a topping or bottoming area. The last signal was a sell 8 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed down -0.320 at 108.880. Volume was 74% below average (consolidating) and Bollinger Bands were 89% wider than normal.
Open High Low Close Volume___
109.220 109.270 108.810 108.880 27,289
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 108.56 108.75 108.33
Volatility: 14 21 12
Volume: 149,920 127,997 96,186
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX JPY= is currently 0.5% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into JPY= (mildly bullish). Our trend forecasting oscillators are currently bullish on JPY= and have had this outlook for the last 0 periods.