According to a poll done by Reuters, the likelihood of the BoJ easing is quickly diminishing. That is at least what economists are predicting if the Japanese Central Bank decides to change its policy in the coming meetings. Economists are confident that the Japanese economy continues to expand with inflation picking up given the accommodative nature of the Japan’s monetary policy which embarked on a series of Bond buying and Asset purchasing programs with an aim of spurring growth and inflation. It looks like they have since achieved that despite inflation not picking up as anticipated. Beginning September 2016, the BoJ announced that it will begin what economist say was akin to tightening by controlling the yield of the 10 year JGB, imposing a -0.1 interest rate on all excess bank reserves and beginning a 80 Trillion Yen bond buying program. From the poll, many economists predicted that the BoJ will likely hold this outlook unless there is a sudden spike of the Yen which could erode value of Japanese businesses in the export market. They also saw the tapering being implemented soon with some projecting the Yen to gain massively against the USD and trade at 80Yen per Dollar, a view which has been strongly rejected by FX analyst who instead are on the contrary and sees the Yen weakening further and trading at around 120Yen per Dollar by the end of the year. We will be of course waiting on the sideline and wait to see what happens and who wins on this monetary policy wrestling. Remember, there is wave of protectionism rising and this is set to begin in the USA with Trump’s proposal of import tax, export breaks for US companies and all in all American workers first. Abe and Trump summit yielded an economic dialogue which shall be headed by Mike Pence and Japanese finance minister who double’s up as their Prime Minister, any positive outcome from this will see the Yen gaining.
Technically, the CHF is on the move and with triple bottoms in 2 months already formed in the daily chart; I only see the CHF gaining. The stochastics is up and the only point of reassurance will come if there is a strong close and break above the daily resistance trend line in the daily chart. My trade plan will be to go long and trade as follows:
Buy Limit: 112.20-50
Stop Loss: 111.70
Take Profit: 115.20
Have a good trading day.