Yen Crash: Approaching the Bottom or Further Decline Ahead?

Yen Crash: Nearing the Bottom or Anticipating Further Plunge

Updated March 2023

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The Yen is still in a corrective stage, and as it’s oversold could experience a rally that could last for one to several weeks before it resumes its correction. There are signs now that it will or should test the 118.00 range. A test of the 118 range will most likely result in a much stronger rally, as there is a lot of support in this zone. This relief rally, though strong, will fail, and eventually, 118 will be taken out. Unless the Yen generates a buy signal (and there is no sign of one yet), it should test the 118.00-118.90 ranges. Market update Nov 27, 2012

To indicate that a bottom is in place, the Yen should not close below 118.08. A close below this level indicates it is ready to test the April 2011 lows. Market update Dec 23. 2012

The Yen failed to sustain its position above 118.08 and swiftly breached its April 2011 lows. The continuous daily sell signal indicates an unabated downward momentum, prompting us to revise our exit instructions accordingly. It appears that the Yen is poised to test the 110 range, reinforcing the validity of this outlook. We advise placing orders to close out all positions in YCS once FXY trades down to the 110 range unless a new buy signal is triggered.

As highlighted in the previous update, we will consider opening positions in FXY once the Yen demonstrates a tradable bottom. However, the overall outlook for the Yen remains pessimistic, and we anticipate this trend to persist. While occasional robust counter-rallies are plausible, the long-term forecast for the Yen remains unaltered, with expectations of establishing a series of multi-year lows.

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Yen Crash Update March 2023

1. Impact of COVID-19: The global pandemic has significantly impacted all world currencies, including the Yen. Initially, in the early stages of the pandemic, the Yen, often seen as a safe-haven currency during times of global uncertainty, strengthened.

2. Government and Central Bank Policies: The Bank of Japan’s monetary policy has also influenced the Yen’s value. The central bank has maintained low-interest rates to stimulate the economy, which can put downward pressure on the currency.

3. Economic Indicators: Japan’s economic indicators, such as GDP growth, unemployment rate, and inflation, also play a role in the Yen’s value. For instance, Japan has been grappling with low inflation or deflation for many years, which can impact Yen’s value.

4. Global Market Dynamics: The Yen’s value is also influenced by global market dynamics, including the performance of other major currencies, particularly the US Dollar, and international economic events.

5. US Dollar Performance: The Yen often moves inversely to the US Dollar. Therefore, a stronger US Dollar can lead to a weaker Yen, and vice versa.

As of October 2021, while the Yen has seen periods of weakening, it’s important to note that currency values fluctuate regularly due to many factors. It’s always recommended to refer to the most current and reliable financial news sources for the latest and most accurate information.