USD/JPY hits session high as BOJ cut assessment on inflation, kept rates unchanged
|- Bank of Japan (BOJ) held key policy tools unchanged as expected, but cut assessment on inflation, underscoring the rising Fed-BOJ policy divergence.
- Consequently, USD/JPY jumped to session highs, could extend gains further.
The USD/JPY clocked a session high of 110.80 after the Bank of Japan (BOJ) cut assessment on inflation, signaling that policymakers will be in no hurry to dial back the stimulus.
At press time, the currency pair is trading at 110.73.
BOJ's decision to offer a weaker view on inflation only highlights the rising divergence between the central bank and its global peers, namely the Fed and the ECB. The US central bank delivered a hawkish rate hike earlier this week and the ECB pulled the plug on its QE program/
Clearly, the JPY is on a weaker footing and hence USD/JPY could soon scale the weekly high of 110.85 in a convincing manner.
USD/JPY Technical Levels
Resistance: 110.85 (weekly high), 111.40 (recent high), 112.00 (psychological hurdle).
Support: 110.41 (5-day moving average), 110.20 (200-day moving average), 110.00 (psychological support).
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