Quite frankly, I just don’t see how the Bank of Japan can change the trajectory of this market, although they have stepped in and ended up intervening from time to time.

The 50-Day EMA sits just below the bottom of the recent consolidation area, and I do think that it is going to offer support. Furthermore, you also have the uptrend line underneath that continues to rally; therefore, I think eventually we will make another move to the ¥150 level. The ¥150 level is a large, round, psychologically significant figure, and will attract a certain amount of attention.

Noise Ahead

After all, this is a market that I think will continue to see a lot of noisy behavior, but at the end of the day it does make a lot of sense that we would see this market continue to rally based upon the strength of the Federal Reserve, interest rates in America, and of course the US economy. Quite frankly, I just don’t see how the Bank of Japan can change the trajectory of this market, although they have stepped in and ended up intervening from time to time.

The interventions can only the ascension of the greenback, not break it down. After all, the Japanese continue to buy unlimited bonds, which is the same thing is flooding the market with that currency. Because of this, the Japanese yen will continue to be like a punching bag against most currencies. Not only will we see the US dollar continues to strengthen against the Japanese currency, but several other ones are having a field day on it as well. Until the Bank of Japan changes its overall attitude, is difficult to imagine a scenario where we would have the Japanese yen appreciate any time soon. However, they stop buying unlimited bonds, we could see the mother of all short sales down the road.

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