USD/JPY: 21-D SMA supports, BoJ minutes easy and USD/JPY pops pips

  • USD/JPY: Tokyo early birds buy in post BoJ 'easy' minutes.
  • USD/JPY: supported by 21-D SMA.

USD/JPY has been stabilising after a better offered overnight session on the US political events and CPI data disappointment.

Funda wrap: White House's revolving door sends dollar and Tillerson packing

USD/JPY made a roundtrip from 106.50 to 107.29 and back overnight. USD/JPY is currently trading at 106.66, up 0.08% on the day, having posted a daily high at 106.71 and low at 106.39 after the BoJ minutes. 

BoJ Meeting Minutes: more of the same, no plans to act:

The Bank of Japan (BoJ) is out with their Monetary Policy Meeting Minutes from the central bank's January discussion. The BoJ governor Haruhiku Kuroda along with his fellow board members are continuing to hold steady to their easy monetary policy stance until inflation reaches their 2% target, and market expectations of an early taper from the BoJ continue to dwindle.

CPI break down:

GDP tracking update and CPI reviewed - Nomura

CPI was rising at an annualized 2.2% during February and 0.2% inter-month, but, taking out food and energy costs, CPI only rose 1.8% year/on year and by just 0.2% on a monthly basis vs 0.3% prior. Thus, this is where the markets have started to discount a fourth or even a third rate hike in 2018 when coupled to the disappointment in the nonfarm payrolls wages data last Friday. The US 10yr treasury yield fell from 2.88% to 2.84% following the US data and news, while 2yr yields held around 2.25%.  Fed fund futures continued to price three more hikes by end-2018 (and another hike in 2019).

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart shows that it stands at daily highs, with technical indicators maintaining their upward momentum within positive territory, and at their highest for this week, as the price extends above a directionless 100 SMA:

"The 200 SMA in the mentioned chart heads modestly lower around 107.60, providing an immediate resistance ahead of the 108.00 figure. A slide below 107.00, on the other hand, will see next supports at 106.60 and 106.35," Valeria added.

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