The JPY/VND exchange rate wavered today after the Bank of Japan (BoJ) delivered its interest rate decision. It was trading at 163.67 on Friday, down by 3.4% from its highest point in September this year. This downward trend may continue, especially if it drops below the important support level of 162.96.
JPY/VND Technical Analysis
The daily chart shows that the JPY to VND exchange rate has been in a strong sell-off in the past few weeks. After peaking at 169.45 in September, it has dropped to 163.67.
A closer look shows that the pair has slumped below the 50-day Exponential Moving Average (EMA). It is attempting to drop below the crucial support level of 162.96, its lowest level in October and the Major S/R pivot point.
The pair also sits below the Supertrend indicator, a sign that bears remain in control. Therefore, there is a risk that the pair will fall further as sellers target the key support level of 160. This price has coincided with the Strong, Pivot, Reverse level of the Murrey Math Lines tool.
JPY/VND chart by TradingView
Japanese Yen Rose Slightly After the BoJ Decision
The main catalyst for the JPY/VND pair was the Bank of Japan interest rate decision , which was in line with what analysts were expecting. The bank left rates at 1.25%, the highest level in decades, with officials remaining concerned about inflation.
Recent data showed that Japan’s inflation rate has remained at an elevated level in Japan’s standards. The Tokyo core consumer inflation rate rose 2.6% in October, lower than the previous 2.7%. The headline CPI also continued rising because of the elevated fuel costs in the country.
These numbers mean that the BoJ may decide to deliver another interest rate hike either in December or earlier next year.
The JPY/VND pair is also reacting to the rising Vietnam’s inflation report. Data shows that the annual inflation rate rose to 5.08% in September from 4.89% in the previous month. Inflation has been in a strong upward trend after bottoming at 2.53% in January.
These numbers mean that the Vietnamese Central Bank may decide to hike interest rates, even as it maintains that inflation remained in control.
The post JPY/VND Forecast After the Bank of Japan Interest Rate Decision appeared first in UK on InvestingCube .
