CADJPY Analysis
CADJPY is falling from the retest area of the broken Ascending channel and moving in a descending channel.
CADJPY Update
CADJPY has broken the Descending channel, which leads to the gap opening on monday due to US shutdown
Reason: Due to the release of more economic news mentioned below, the market is not making technical movements at this time.
Why JPY is Weaker
Ultra-loose monetary policy – The Bank of Japan keeps near-zero interest rates while other countries have high rates, widening the rate gap.
High national debt – Japan’s debt exceeds 230% of GDP, hurting investor confidence.
Political and fiscal weakness – Political fragmentation and poor fiscal discipline delay reforms and budget consolidation.
Strong U.S. dollar & capital outflows – Investors prefer higher-yield foreign assets, pulling money out of Japan and weakening the yen.
Why CAD is Stronger
High Interest Rates – The Bank of Canada maintains relatively high rates, attracting foreign investment and strengthening CAD.
Strong Oil Prices – Canada is a major oil exporter, so rising oil prices increase demand for CAD.
Healthy Economy & Inflation Control – Stable growth and controlled inflation support investor confidence.
Positive Trade Balance – Higher export earnings (especially from energy) improve Canada’s trade surplus, boosting the CAD.
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