BoJ IR Event Based Click-In Scenarios - Updating Daily

2016년 7월 24일

If you fancy clicking into events, a good fill on any of the cases identified can provide sustained profit for a few minutes given the amount of volume and institutional order flow in USDJPY anticipating the interest rate decision this Thursday. The market is definitely expecting some relief for yen strength, as Japanese exporters are crying for mercy and Abe + Kuroda have promised some sort of easing, save helicopter money.

The way I see it, a cut to -.2 and/or the unlikely scenario of helicopter money, or something essentially the same in all but name, will validate the bull theory and cause a whip up until around the at least the 107.50 (soft resistance) to 108.00 (strong resistance). A minor cut of -1.5 promotes upward move until the stronger resistance to 107.50 while the unchanged scenario will provide some bearish pressure to the 105 (soft support) to 104 (strong support) levels.

This is purely based on how I have observed this product trading on the interbank FX ladder post Brexit and is subject to change given outsized news promoting dollar strength/weakness prior to the BoJ decision or any remarks by Abe or Kuroda in the upcoming days. I will update price targets and levels below throughout the week accordingly.