- The USD/JPY has bounced from Tuesday's lows, but downward pressure remains overall.
- The BoJ missed another opportunity to inspire confidence, instead wiping out timeline projections for inflation to hit targets.
The USD/JPY is trading close to the 110.00 handle in early Wednesday action following Tuesday's drop-and-bounce as broader markets roiled following a notable ramp-up in the trade war rhetoric between the US and China.
Another round of tariffs from the US targeting $200 billion more in Chinese goods is expected to make its way into headlines soon, pending a write up by the US Treasury Department, and market risk appetite evaporated yesterday as traders balk at the prospect of US President Donald Trump bringing a trade war one step closer.
The Bank of Japan (BoJ) released their latest Monetary Policy Meeting Minutes, and little of note came out of the report, with the BoJ noting that it is currently "appropriate" for the central bank to abandon their timeframe for achieving their inflation target of 2%, a goal that has remained far out of reach for the Japanese economy despite record-setting easy monetary policy.
The rest of the week has little of consequence for the Yen, until National CPI figures late Thursday at 23:30 GMT, though the effect will be muted as Tokyo CPI, which releases several weeks earlier, is an accurate bellwether of inflation within Japan.
USD/JPY levels to watch
As noted by FXStreet's own Valeria Bednarik, "technically, the pair has broken below a key Fibonacci level, the 61.8% retracement of its latest daily slump at 110.15, now the immediate resistance, but holds above the 50% retracement of the same decline. In the 4 hours chart, the price is battling to regain ground above its 100 and 200 SMA, both converging a few pips below the current level, while technical indicators have bounced modestly from oversold readings, but present limited upward strength, suggesting that bulls are losing the grip. The immediate support is the daily low at 109.54, followed by 109.19, the low set last week. Below this last, bulls will probably give up and the pair could enter sell-off mode."
Support levels: 109.55 109.20 108.70
Resistance levels: 110.15 110.45 110.80
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.