Interest rate differential continues to drive currency pairAs the pair approaches the 157 yen region, it is crucial to understand that we may get a little bit of volatility right around the time that the press conference starts, but at the end of the day the Japanese have some of the highest debt load in the world and therefore cannot handle higher interest rates. The Japanese economy has started its death spiral as population shrinkage is finally catching up with the debt load that the Japanese picked up in the 1980s. Altered loose monetary policy will continue to be a major issue with the Japanese currency and all things Japanese related.Because of this, just about any currency I can think of has gained against the Japanese yen over the course of the last couple of years, including the lowly Swiss franc. Even the Swiss franc pays interest against the Japanese yen, and now it looks like the market will be paying close attention to the ¥160.00 level where the Bank of Japan intervened several weeks ago. There is not much out there right now to keep the market from overwhelming the Japanese, and I do believe it is only a matter of time before we break through that area. Because of this, i remain long of this USD/JPY pair and will buy into any dip that we get. I have no interest in owning the Japanese yen, nor am I willing to pay the swap at the end of every trading session for the privilege.More By This Author:BTC/USD Forecast: Finding Support AgainEUR/CHF Forecast: Is The Euro Finding A Bottom Against The Swiss Franc? USD/JPY Forecast: Greenback Continues To See Upwards Pressure Against Yen
