The pair rallied towards north from 97 to 103.40. The Bank of Japan helped to push yen 6 month's low. Better than expected US economic data increased expectations of a near term tampering of the Fed's purchasing program.
The Japanese PM proceed with his April sales tax raise form 5% to 8% and a $51 billion stimulus plan. The BoJ would continue buying enough assets to pump up the monetary base at a rate of about $596-695 billion.
The Japanese stock market Nikkei push to a 6 month high going north very strongly, we expect Nikkei would climb 17k, 17,500 levels. Japan is going to invest $2tn of pension funds in stocks and other riskier assets. Japan's central bank maintained its target for asset purchases, as widely expected. We expect some liquidity landed in India and America probably next year. This is the time Western Gold Community will focus on Japan's liquidity to buy gold which is currently trading at uneconomic levels.
The pair halted at a major resistance level May's high 103.73. On the down side strong support exists at 101.5
Our long term target is 125.
Recommendation-
Buy above 102.7 the pair will jump to 103 103.5 103.7. Downside support at 102.2 102 101.5
