【Non-moving USD/JPY…】When is the timing for USD/JPY to start moving significantly?

To put it bluntly, the timing when USD/JPY starts to move significantly (a trend emerges or volatility spikes) is

as early as in the middle of this month (mid-June)
late June to July is the first strong candidate

■ Why hasn’t it moved recently?

The recent stagnation of USD/JPY was due to
the two big barriers: the psychological level around 160 and expectations of government intervention

・Participants are cautious after large-scale yen-buying interventions in April–May
・Ahead of the Bank of Japan and Federal Reserve meetings next week

Because the government and the Bank of Japan conducted the largest-ever FX intervention (about 11.7 trillion yen) from April to May, market psychology struggled with a “once we rise above 160, another huge intervention may come...” brake.
Therefore, buying and selling around 159–160 yen has become tangled, leaving little room to move,

a state where it is difficult to push it up or down

In reality, after intervention, market stability increases and volume tends to shrink
Currently, it can be described as a calm before the storm (a cautious mood near the upper end of the range around 160 yen).

■ Now is a period where it’s hard to discern a direction—both up and down are hard to push

* Around 158–160 yen → heavy due to intervention vigilance
* Around 155–156 yen → pullback buying tends to come in

However, this stalemate often doesn’t last long,
and volatility is likely to return from the second half of June into July.

From a trader’s perspective,
the view is closer to: “Now is not a market to grab profits, but to wait for the next big trend to occur.”


■ Some view that 2024 is similar

In 2024 too,
① intervention ⇒ ② decline in volume ⇒ ③ range-bound market ⇒ ④ when the fundamentals change, a strong trend emerges
that was the sequence.


I’ve summarized a schedule of events to watch for when and why moves may occur.

■ An eventful schedule with high likelihood of movement

The market’s most feared discord between US and Japan monetary policy will surface all at once next week.

* Mid-June: BoJ meeting
* Mid-June: FOMC
* July: US CPI and jobs report
* Late July: BoJ meeting

What the market is most focusing on is the timing of Fed rate cuts and BoJ further rate hikes; if either of these outlooks changes substantially, it will be easier to break out of the current range.

* June 17–18 (next week): US FOMC
The FOMC will indicate its stance on future rate cuts or hikes. If a hawkish (rate-hike biased) tone appears here, there is a strong possibility of a rapid dollar rally.

* June 18–19 (next week): BoJ Monetary Policy Meeting
The market increasingly expects the BoJ to raise the policy rate to 1.00% (over 90% of economists predict this). The decision on rate changes and the pace of QT (reducing government bond purchases) will cause sharp fluctuations in the yen.


Two scenarios for movement

After next week’s events, the chart is likely to break out in one direction.

■ Upward breakout (yen depreciation) scenario
If US inflation remains elevated and the BoJ maintains a weaker rate-hike stance than market expectations (hawkish bias), the 160 barrier could be breached, pushing toward the 161 yen region to the low-162s. Of course, there is a risk of intervention again, leading to wild swings.

■ Downward breakout (yen appreciation) scenario
If the BoJ decisively hikes to 1% and reduces government bond purchases while expectations for US rate cuts grow, the narrowing of the rate differential could reverse the dollar-up trend and push yen higher quickly.

■ From the end of this week into next week, the stagnant state could suddenly yield rapid rate moves, as if it were a lie.

If you hold positions, it is advisable to manage stop orders more cautiously to avoid being caught in abrupt volatility.

The method I am currently practicing is here
(I have added a currency strength filter as well)
★★ A steady trade of only +10 pips per day (1 day, 2–5 hours) ★★
I combined two methods learned from a genuine professional trader (mentor) and added a logic that clarifies entry points
Not to “win” but to “make money” in trading
Trade only with the expectation of taking long positions where the probability of rising is high
Thought processes of overseas pro traders (legends like Buffett and Soros)


https://www.gogojungle.co.jp/tools/ebooks/76385

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