The big risk event from recent session was BOJ rate decision, but it only was of big importance because market participants assumed that the BOJ would follow up with an upgrade of his stimulus program. The BOJ did nothing however the yen pairs were sold of in a strong fashion way but this only happened during the NY session.


Figure 1. USD/JPY Daily Chart

What we saw with the yen movements was not a general risk aversion theme because the S&P500 and also the US dollar were not confirming this move, so does this mean that we can see a follow through movements in the yen pairs? I'm not sure about that as to be quite honest this sell of in the yen pairs took me by surprise and for sure I was not expecting this to happen. This maybe a confirmation to the market that the risk reward element of the carry trade of the yen crosses which are traditionally carry trades has deteriorate.

I suspect the move was more because of dollar weakness across the board than the general risk aversion scenario.

Best Regards,
Daytrader21.
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