The Bank of Japan Monetary Policy Statement, and Policy Rate will be released late this evening. Then at 2:30 am New York time on Friday, the Bank of Japan Press Conference will be held. The Monetary Policy Statement and Policy Rate typically creates excessive volatility in the Yen pairs. However, using binary options, traders can still trades these volatile moves using limited risk opportunities.
Bank of Japan Monetary Policy and the Yen
The 240-minute chart on the EUR/JPY indicate that the market is in a downtrend, although the pair may retrace upwards today. A test of the 123.20 or 123.51 area is expected. If price tests either of these resistance areas, and hidden divergence is revealed on the stochastics, with a reversal bar, more downward movement should be anticipated. If these areas do not offer any resistance, than the EUR/JPY could move up after the reports.
The USD/JPY has a very similar pattern. Currently the USD/JPY is in a retracement back to the ATR (red plus sign) at 110.11, plus a rejection of 110.28 from the FOMC Rate Announcement yesterday. The ATR at 110.11 should offer resistance for another down move. However, if they manage to break this area (closing above the 110.11 or 110.28 area), then we could see an upmove after the report. However, the test for resistance or support, combined with reversal bars, will provide the biggest clues as to the direction the market is likely to move.
Since there is no specific time given for the release of the Monetary Policy Statement (although it is typically released after 10 pm New York time and before the midnight), the best way to capture the potential move is by trading binary options either daily (3am, 7am, or 11am New York time expiration) or the 3pm weekly expiration.