- The Bank of Japan (BOJ) deleted mention of a time frame for price target in the outlook report.
- The USD/JPY sees little action, traders await Kuroda presser.
Having pushed back the timeframe for achieving inflation forecasts six times, the BOJ decided to delete the mention of the time frame from its outlook report.
So, the central bank has accepted in an indirect way that the 2 percent inflation target will likely remain out of reach for a few years. Further, the policy statement also mentioned downside risks to prices. Thus, QE taper is still a distant dream, and hence the Yen may run into offers.
However, so far, the USD/JPY has turned a blind eye towards the dovish BOJ. The pair was last seen trading at 109.22 - largely unchanged on the day. The central bank kept key policy tools unchanged and cited sales tax hike as a key risk to the economy.
The focus now shifts to BOJ governor Kuroda's press conference. The pair could spike if BOJ Governor Kuroda puts more stress on in the weak price pressures and expresses readiness to do more.
USD/JPY Technical Levels
A break above109.26 (1H 50-MA) would open up upside towards 109.47 (recent high). A violation there would expose the psychological hurdle of 110.00. On the downside, breach of support at 109.00 could yield a deeper pullback to 108.28 (Jan. 26 low) and 108.00 (zero levels).
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