Bank of Japan will help USD/JPY
By Elizabeth Belugina
During the past week USD/JPY corrected up to 110.75. The US dollar managed to strengthen as oil gained and the market’s risk sentiment improved decreasing demand for Japanese yen as the safe haven. In addition, Bloomberg reported on Friday that the Bank of Japan was considering additional policy easing in form of offering banks negative interest rates on some loans. Now the BOJ has negative rates only on some excess reserves of the financial institutions.
The meeting of Japanese central bank will take place on Thursday, April 28, right after the US Federal Reserve makes its decision on Wednesday. No changes in the Fed’s policy are expected. The expectations that the BOJ may lower rates further. These expectations will likely keep USD/JPY supported. Also note that Japan will release a block of important data on Thursday: inflation, retail sales and industrial production figures.
Levels in the 108.00/107.60 area represent good support: the pair tried to break lower several times, but failed. There’s also support at higher levels – at 109.75 and 109.10. Resistance lies at 111.40 and 112.00/35.