BOJ's Kuroda fails to move the needle on USD/JPY

Bank of Japan Governor Kuroda, while speaking in Parliament earlier today, expressed willingness to ease more if the momentum toward the 2 percent inflation target is lost. 

So far, however, Kuroda's dovish comments have failed to put a strong bid under USD/JPY. As of writing, the spot is trading in the red
just below 112.00, having hit a high and low of 112.05 and 111.89, respectively, earlier today.

BOJ's Governor also took note of the negative impact of the external sector and weak wage price inflation despite the labor market tightening. Even so, the markets are not willing to offer JPY, possibly because the bank has little room left to stimulate more, having run an unprecedented stimulus program for six years. For instance, the BOJ reportedly owns 77 percent of the total exchange-traded funds (ETF) market and further purchases may damage stock markets efficiency to allocate capital. 

That said, the anti-risk JPY could drop during the day ahead, as technical studies are biased toward the USD bulls. The pair closed well above 111.82 on Friday, establishing a bullish higher high and validating the higher low of 110.84 created on April 10. As a result, the pair looks set to print fresh multi-month highs above 112.14. The bullish case would weaken if the spot finds acceptance under 111.82.

Technical Levels