Jump to content

JPY Q1 2022 Fundamental and Technical Forecasts

Recommended Posts

JPY Q1 2022 Fundamental Forecast: USD/JPY, Fed, Labor Market Eyed

How to Trade USD/JPY? - R Blog - RoboForex


The anti-risk Japanese Yen had a mixed performance against its major peers throughout the fourth quarter of 2021. It weakened against haven-oriented currencies, such as the US Dollar and Swiss Franc. On the other hand, it found some strength against growth and cyclical-sensitive currencies such as the Australian, Canadian and New Zealand Dollars as volatility hit stocks.


For USD/JPY, the road ahead in the first quarter of 2022 will likely remain heavily glued to market expectations of how hawkish the Federal Reserve will be – see chart below. In December, the central bank doubled the pace of tapering asset purchases, which will now see it end in early 2022. This will likely give the central bank maneuverability should it need to raise rates sooner than expected.

This will of course depend on how inflation evolves. Headline price growth is at its fastest pace in almost 40 years in the United States. Expectations are that price growth will remain above the central bank’s target next year, with Core PCE running around 2.7% in 2022. However, a key risk could come if inflation expectations become “de-anchored.”  


USDJPY December 2022 Rate Hike Bet

Chart Created Using TradingView


When inflation expectations are anchored, it typically means that short-term price growth does little to impact long-run estimates. This could be due to people expecting the Federal Reserve to maintain its inflation target down the road. However, if consumers anticipate inflation to linger instead, then those estimates can become “de-anchored”.

This can occur when workers, facing high inflation, demand higher wages to combat losing purchasing power. Businesses can respond by driving up costs of products to counter paying higher salaries. This creates a spiral -- difficult for a central bank to counter. With that said, the Federal Reserve has ample room to tighten monetary policy given how loose policy has become in the post-Covid world.

How does the US labor market look? As the chart below shows, the labor force participation rate remains stubbornly below pre-Covid levels. This is despite the country recovering about 80% of jobs lost since the Covid shock in 2020. On the plus side, jobless claims are at their lowest since 1969 while the number of openings is at their highest on record.

These trends hint that the country might be able to accommodate a surge in labor force participation without bringing up unemployment too quickly. If new workers entering the labor force seek higher wages amid elevated inflation, then salaries could rise, pushing up prices and opening the door to a more hawkish Fed. That could keep the focus for USD/JPY tilted upward. Another consequence might be more stock market volatility. This is something the JPY may capitalize against AUD, CAD and NZD.


US Labor Force Participation Rate

Chart Created Using TradingView


By Daniel Dubrovsky, Strategist, 26th December 2021. DailyFX

Link to comment

JPY Q1 2022 Technical Forecast: USD/JPY Chart Points Higher to Kick Off the Year

USD/JPY Forex Technical Analysis – Omicron Uncertainty Traps Traders  Between 114.029 and 113.173


The Japanese Yen saw significant weakness against the US Dollar in 2021. USD/JPY gained in all but three months last year, with the currency pair hitting the highest level since January 2017 in November. US Dollar bulls controlled the narrative in Q4 2021, which puts prices on a strong footing to rise further in the new year.

USD/JPY made several key technical victories last year, including a climb above a descending trendline from the early 2017 swing high. That trendline capped upside movements in the pair for the preceding year until March 2021, when prices pierced above the level. The 200-week Simple Moving Average offered confluent resistance, but the levels turned to support, and prices subsequently broke higher. That strength saw a clean break above the psychologically imposing 110 handle.


USD/JPY Monthly Chart

Chart created with TradingView


The weekly chart highlights possible levels of resistance and support that may appear in Q1. The 61.8% Fibonacci retracement level from the 2015 high to 2016 low has already showed to be a sticky point in Nov. A break above that, however, puts focus on the late 2016 swing high at 118.665. Shortly above that level lies the 78.6% Fib, with a full retracement to the 2015 multi-year high serving as the next likely resistance point.

Alternatively, a move lower has several potential support levels. The rising 100-day SMA offers the first line of defense against a bearish move, with the moving average tracking shortly below price levels in December. The 200-day SMA sits in a nearly confluent position along the 110 psychological handle and the 38.2% Fibonacci retreat. The 2017 trendline comes into play just below those levels.

One point of concern is a negative divergence between prices and the Relative Strength Index (RSI), highlighted in red in the chart below. The divergence suggests that upside energy may be waning. USD/JPY bulls will want to see RSI break above the level around 75.54 the next time prices rally higher to break the negative divergence.


USD JPY Weekly Chart

Chart created with TradingView

By Thomas Westwater, Analyst, 25th December 2021. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 05/02/23 22:01
  • Posts

    • SP500 | NASDAQ | Russell 2000 | Dow Jones: Elliott Wave Technical Analysis Content: SP500 - NASDAQ 100 - RUSSELL 2000 - DOW JONES Summary Bullish Impulse wave structure moving higher Elliott Wave (iv) of iii) of 3 of (3) of 1) Strategies Holding long Video Chapters 00:00 S&P500  11:33 NASDAQ 100 (NDX) 12:26 Russell 2000 (RUT) 13:23 Dow Jones (DJI) 19:16 TRIAL Buy 1 Month Get 3 Months Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com  
    • Q: How can I experience the Fairy Cat metaverse? A: Debuting in January 2023, Fairy Cat is one of the most popular crypto metaverse games. While earlier games (World of Warcraft, League of Legends, Destiny 2) either precede blockchain technology or have not integrated it into their games at all, more recent metaverse iterations - such as FairyCat - integrate metaverse games and blockchain platforms. These so-called "crypto metaverse" games use blockchain technology to achieve encrypted in-game cash, play-to-earn (P2E) and non-fungible tokens (NFT), decentralization and other functionality to bring extraordinary benefits to metaverse games. relevant impact. You don't need to be a crypto expert to play this innovative game, although a little crypto knowledge is helpful to take advantage of all the functionality of FairyCat. Start exploring Fairy Cat: 1. Go to the Fairy Cat website to learn more about the game's currency models, then download the Metamask wallet. 2. Start earning money by opening the game in the Metamask wallet browser. At this point, the game will connect to your wallet account. Don't worry that this game will steal your wallet balance, because it doesn't need your account authorization data, it just needs your wallet data. 3. Once you are in Fairy Cat, you can go through a money transfer tutorial to learn the basic controls. Then you can earn money in the following three methods: Method 1: Adopt a cat to help you find treasures, and you can make profit after selling the treasures. Method 2: Synthesize an LV1 elf cat through 5 elves, and then sell the LV1 elf cat to earn money. This can be understood simply as using 5U to earn 10U (50% probability), and you can buy items to increase the synthesis rate. Method 3: Invite your friends to play the game. After your friends earn money, you can also get commission income. The income is very high.
    • HI,  Please if any IG supporting staff can answer the questions below? 1. in the upcoming AMC/APE vote on 14 March 2023, can shareholder that hold AMC and APE at IG able to make a vote? I also have AMC and APE at IBKR and they did send out a notification to inform me that I can do proxy vote. Will IG do the same? 2. the upcoming vote is to determine APE covert back to AMC then do reverse spilt. Last year after APE issued, IG staff told me that they have to move APE to share dealing account from my ISA account as ISA is not eligible to hold APE (which is completely unbelivable, my APE at AJ Bell and HL are still sitting in ISA account). Anyway, if the conversion and reverse spilt is going to happen, will IG move my APE back to ISA account for the corporate action? Many Thanks
  • Create New...