USD/JPY Tests 130.00 as New BoJ Governor Rumors Swirl

USD/JPY Price and Chart Analysis

• The new BoJ governor will have a tough job on his hands.
• USD/JPY slides lower in volatile end-of-week turnover.

According to breaking news in The Nikkei Asia, a former BoJ policy member, Kazuo Ueda, is set to be offered the position as the next governor of the Bank of Japan (BoJ) when incumbent Haruhiko Kuroda’s term in office expires on April 8. The Japanese paper also reveals that Shinichi Uchida and Ryozo Himino will be offered deputy governor positions.

Earlier this week it was reported that deputy governor Masayoshi Amamiya had been approached about the role but market reports now suggest that he declined to take talks further. Mr. Amamiya was heavily involved in charting the country’s ultra-loose monetary policy with current governor Kuroda.

The Japanese Yen has grabbed a bid with USD/JPY now testing 130.00. Today’s move has seen all of this week’s USD/JPY gains, nearly 3 points, erased after the pair printed a 132.90 high on Monday. It seems as though the market is starting to price in a move away from the current ultra-loose monetary policy when Kuroda retires.

The USD/JPY remains biased to the downside, aided by last month’s death cross when the 50-dma traded through the 200-dma. USD/JPY is now looking to break below the 20-dma and a confirmed close below this indicator would suggest lower prices ahead.

USD/JPY Daily Price Chart – February 10, 2023

Chart via TradingView

Retail Trade Data – Fiddling Round the Edges

Retail trader data show 47.03% of traders are net-long with the ratio of traders short to long at 1.13 to 1.The number of traders net-long is 0.19% higher than yesterday and 8.27% lower from last week, while the number of traders net-short is 2.50% higher than yesterday and 6.36% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USD/JPY-bullish contrarian trading bias.

What is your view on the USD/JPY – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.