USD/JPY retreats to 111.00 after BOJ keeps rates unchanged


USD/JPY trimmed gains after the Bank of Japan held monetary policy steady. The spot retreated to 111.00 levels and was last seen trading around 111.20 levels. 

The details revealed two dissenters – Kiuchi and Sato- from the decision to hold the yield curve control target unchanged. The bank raised its assessment on private consumption and boosted its view on the overseas economy, but also took note of the weakness in the inflation expectations. 

Focus on Kuroda

Later today, BOJ Governor Kuroda will hold a press conference to discuss the deliberation of the central bank board. 

The central bank chief is likely to reiterate bank’s commitment to meet the 2% inflation target. Traders would want to hear from Kuroda about the QE exit strategy, given the fears regarding

BOJ’s bloated balance sheet size and eventual taper tantrum are mounting. Talk about QE taper/balance sheet reduction could strengthen the bid tone around the Japanese Yen. 

USD/JPY Technical Levels

A break above the session high of 111.27 would expose resistance at 111.57 (4-hr 200-MA) and 111.71 (June 2 high). On the downside, breach of support at 110.89 (4-hr 5-MA) would open up downside towards 110.56 (4-hr 50-MA) and 110.34 (Intraday chart support). 

 

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