As TRY/JPY trades near its all-time low, market attention is rising this week ahead of US and Japanese central bank meetings and the release of Turkey's November CPI.
Since the start of the month, TRY/JPY has fallen to ¥3.120, setting a new all-time low. On the 22nd, the TCMB cut its one-week repo rate from 37.00% to 36.00%, but despite the cut being in line with market expectations, lira selling continued as the yen strengthened and US long-term Treasury yields fell.
The pace of decline in the lira itself has remained stable, with USD/TRY up around 0.4% for the week. Japan's wide interest-rate differential and the lira's high-yield appeal remain intact. The daily positive swap points on a position of 10,000 currency units are approximately ¥24.
This week's expected range is ¥3.10–¥3.19, with the focus on the outcomes of the FOMC and the Bank of Japan's policy meeting. Expectations for an additional Fed rate hike in December and the BOJ's stance on further rate hikes are expected to influence the market.
Technically, the 25-day moving average stood at ¥3.191 as of the 27th, limiting upside. A recovery to ¥3.17 is expected to be viewed as an important resistance level, with the pair potentially moving sideways around ¥3.12.