Monetary Policy: - BOJ is making a significant change - Longterm YieldCurveControl target of 0,25% is relaxed to 0.50% - Higher targets are to be considered - This would mean more YEN-strength - FED still hiking rates, but expected target-rate for 2023 is moderate: 4,75% - 5.00%
COT: - Institutions started distributing USD-Longs since Q3-22 - Insititutions started distributing JPY-Shorts since Q4-22 - Both moves reinforce eachother in pushing down USDJPY - Distribution-phase seems to continue in Q1-23
Seasonality: - JAN is generally weak for USDJPY, so in line with expectations - FEB & MAR are not weak for USDJPY (but Monetary Policy & COT outweigh Seasonality)
Pivot Points: - Q4 was (fast) run from Quarterly R1 to Quarterly S1 - Looks like mid-DEC was start of frontrun Q1-23 - Projected Quarterly Pivot for Q1-23 was sold end DEC-22 - Quarterly Pivot predicts Quarterly S2 with QS1 as (conservative) first target = 125