USD/JPY drops marginally to 108.70 as BOJ refrains from altering current monetary policy
|- BOJ held its monetary policy unchanged while cutting near-term inflation and GDP forecasts.
- USD/JPY traders decline marginally as market expected a bit dovish statement.
- US data, trade/political headlines in the spotlight for now.
With no major change in the Bank of Japan’s (BOJ) monetary policy, the USD/JPY declines to 108.68 during early Tuesday.
Meeting wide expectations, the BOJ left its monetary policy unchanged with short-term interest rate target at -0.1% while keeping 10 year Japanese Government Bond (JGB) yield target around 0%. The central bank cut near-term inflation and Gross Domestic Product (GDP) forecasts in the quarterly economic outlook while highlighting the downside risks to the economy in the statement.
Even if no monetary policy change was anticipated investors were aiming for a bit more dovish statement ahead of the event.
The BOJ policymakers have recently been loudmouthed about easy monetary policy after the Prime Minister Shinzo Abe gained majority seats in the Upper House. PM Abe’s victory ensures the sales tax hike in October and needs for additional easy money.
Risk sentiment remains modestly unchanged as global investors await details of trade negotiations between the US and China whereas noises surrounding the Middle East and Fed rate speculations keep providing background music. The US 10-year treasury yield, followed generally to gauge global risk, holds steady around 2.065% by the press time.
In addition to trade/political news headlines and market concerns over the Federal Reserve’s upcoming rate cut, a slew of data concerning income, spending, housing and consumer confidence is also up for publishing from the US.
Technical Analysis
Prices need a successful run above May 13 now, near 109.00, in order to aim for 100-day exponential moving average (EMA) level of 109.30 and further target 110.00, failing to do so can recall 108.40 and 107.80 on the chart.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.