Bank of Japan governor Kuroda and the new prime minister Kishida agreed on the %2 inflation goal. BOJ continues its ultra-loose monetary policies to raise the price level. Japan’s CPI finally get to the positive zone but is still too low relative to the rest of the other big economies. Japanese 5-year inflation expectations are in an uptrend but still lower than a half percent.
USDJPY is benefiting from the diverging monetary policies between the US and Japan. Fed will most likely announce tapering at tomorrow’s meeting while Japan is still staying loose.
USDJPY is in an ongoing uptrend and follows %76.4-%38.2 zone inside the channel. Currently, a possible bullish flag is ongoing. Until the orange line breaks, USDJPY may stay calm below it. But as long as the price stays above 112.60 the main direction will be upwards.
Over the orange line, 115 and 116.41 can be the next target for bullish runs.