The USD is at a 20-year high, Yen in all-time low!
Inflation is the primary concern in the most developed economies, and central banks are withdrawing their expansionary monetary policies, but not in Japan. Bank of Japan believes that the Japanese economy still needs support, and that's BoJ members even redoubled its easy monetary policy.
BoJ, in its Thursday, April 28th meeting, decided to purchase bonds through fixed-rate purchase operations to limit the rise in Japanese Government Bond (JGB) yields. With this decision, the central bank can increase its share in the Japanese Government Bond (JGB) market much more than now. According to the reports, BoJ currently owns around 50% of the outstanding JGB market.
This policy by the central bank clearly and strongly pressures the Yen. On the other hand, increasing the Yields in the US bond market makes that market more attractive to Japanese investors; and liquidity moves towards the US market and US dollar.
I have to remember that BoJ is one of the most interventionist central banks in the currency market. However, analysts in Wells Fargo bank "suspect meaningful FX intervention would not occur until the yen reached JPY140.00."
With the current situation, while we have the US dollar at its 20-year high and the Yen at its all-time low, buying the Yen could be a sound long-term investment. Although this policy, for now, puts the Yen under pressure, it also means that they support the production and economy, which means stronger currency at the end of the story.
From the technical point of view and the Daily chart, the MACD line is cutting the histogram from top to bottom, while market volume is much higher than the 20 DMA line. Technical indicators in the clear uptrend have started showing the possible correction or even trend change. However. For a trend change, we need first to see the price under 20 DMA at 126.70
