USD/JPY trims losses ahead of Kuroda's presser
|- USD/JPY trims losses to trade at 110.80.
- BOJ keeps rates unchanged, changed the language on inflation.
- Focus on Kuroda's press conference.
USD/JPY dropped to 110.54 after the Bank of Japan (BOJ) kept rates unchanged as expected but sounded slightly optimistic about inflation expectations.
The central bank said, "inflation expectations are moving sideways" as opposed to previous quarterly report, which took note of weakness in inflation expectations. This change in language may have pushed Yen higher.
That said, the spot has trimmed losses to trade at 110.80, given the expectations that BOJ's Kuroda will stress bank's resolve to maintain ultra easy monetary policy for some time. Yen may rise sharply across the board if Kuroda talks about the costs of running easy monetary policy and/or sounds upbeat on inflation.
USD/JPY Technical Levels
A move above 111.03 (38.2% Fib R of Sep-Nov rally) would open doors for 111.41 (38.2% Fib R of Jan. 8 high - Jan. 17 low) and 111.48 (Jan. 18 high). On the other hand, a breach of support at 110.49 (Jan. 19 low) would open downside towards 110.19 (Jan. 17 low) and 110.00 (zero levels).
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