USD/JPY Current price: 109.81

  • The Bank of Japan is expected to maintain policy unchanged, focus on climate change.
  • US government bond yields fell to fresh weekly lows post-Powell.
  • USD/JPY is poised to extend its decline heading into the weekend.

The USD/JPY pair ended Tuesday below the 110.00 threshold and near its daily low. The pair fell to 109.70 at the beginning of the day, recovering to 110.08 ahead of the US opening, to later resume its decline. The soft tone of the pair was back by stocks, as global indexes remained under pressure while US government bond yields fell to fresh weekly lows. The yield on the 10-year Treasury note stood at 1.299%, limiting the upside for USD/JPY.

Earlier in the day, Japan published the May Tertiary Industry Index, which fell by 2.7% worse than the previous -0.7%. This Friday, the Bank of Japan is having a monetary policy meeting and is expected to maintain its monetary policy unchanged. Interest rates stand at -0.1%, while the central bank has set a target at around zero per cent for its 10-year yield target. Market participants will be looking for clues on whether policymakers decide to encourage banks to deliver green financing.

USD/JPY short-term technical outlook

The USD/JPY pair maintains the near-term bearish stance, heading into the Asian opening trading in the 109.80 price zone. The 4-hour chart shows that it spent the day below all of its moving averages, although the 20 and 200 SMAs converge directionless at around 110.20. Technical indicators resumed their declines within negative levels, with the Momentum already at fresh lows, supporting a bearish continuation.

Support levels: 109.70 109.25 108.90

Resistance levels: 110.20 110.65 111.00  

View Live Chart for the USD/JPY

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