Today, the Canadian dollar (CAD) has fallen against the Japanese yen (JPY). At 88.62, the couple is losing ground. However, due to the higher high wave printed on the upside of the CAD/JPY currency pair, it may print a positive move in the coming day.

Several reasons stand behind it, but the most crucial that might hit the price and push the progressing pair below to the 89.00 is the Bank of Japan’s (BoJ) interest rate announcement.

On Friday, the Bank of Japan (BoJ) issued its decision on rates, which held at -0.1 percent this month, while bearing no change as compared to the month before data.

If the central bank is hawkish about the economy’s inflationary prospects and raises interest rates, the JPY is optimistic, or bullish. Similarly, if the BoJ takes a dovish assessment of the Japanese economy and keeps or lowers interest rates, it is considered negative or bearish.

There is an idea that this fall will last for a while because Statistics Canada will announce the retail sales statistic for November on December 22, 2021, which economists believe will remain -0.1 percent in October compared to the month before data of -0.6 percent.

Retail sales data is a monthly study that reveals all things sold by merchants based on a sample of various retail shop types and sizes.

It reflects the retail sector’s short-term success. Bullish moves in the Canadian dollar are generally indicative of favorable economic development.

Conclusion

Trading the CAD/JPY currency pair might be profitable in the short term. However, traders who intend to trade the pair for the long run have a higher probability.