Currency Analyst since 2010

USD/JPY after the Bank of Japan

USD/JPY slid from Monday’s highs above 99.00 and tested levels below 98.00. The Bank of Japan refrained from extending the maturity of loans to banks. As a result, investors who had expected measures to stem volatility in the nation’s bonds got disappointed (Japanese bond yields climbed from 0.3% in April to about 1%) and saw the possibility to buy back yen. At the press conference, however, the BOJ Governor Kuroda has assured the market players that the central bank will continue efforts to curb JGB volatility. According to Kuroda, it’s far too early to debate an exit from monetary easing, though for now no new measures are needed.

USD/JPY has regained solid footing after it reversed up on Friday. However, the recovery found an obstacle at 99.30 yesterday. Resistance is at 98.50, 99.00 (55-day MA) and 100.00. An increase above 100.70 (top of the Cloud on H4) is needed to change bearish outlook. Support lies in the 97.70/50 area and at the recent lows. Consolidation in the coming sessions looks possible.

Chart. H4 USD/JPY

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