USD/JPY edges higher around 110.00 on BOJ status-quo, downbeat forecasts

  • USD/JPY remains on the front foot after BOJ kept monetary policy unchanged and revised down FY 2021/22 economic forecasts.
  • US dollar bulls cheer risk-off mood, ignore downbeat Treasury yields.
  • Virus concerns intensify outside Asia–Pacific, Tokyo also marks six-month high infections.
  • BOJ’s Kuroda eyed for immediate direction, US data, risk catalysts will be the key.

USD/JPY pays a little heed to the Bank of Japan’s (BOJ) monetary policy announcements, stays positive around 110.00, up 0.16% intraday, amid early Friday. The reason could be traced to the US dollar’s sustained strength amid risk-off mood and already expected move by the Japanese central bank.

BOJ keeps benchmark policy rate on hold at -10 basis points (bps) while maintaining its pledge to buy J-REITS at an annual pace of up to JPY180 billion during the July monetary policy meeting. In doing so, the Japanese central bank said, “Japan's economy remains in the severe state but picking up as a trend,” per Reuters.

Read: BOJ stands pat in July, downgrades FY 2021/22 growth outlook

In addition to the BOJ’s inaction, the US dollar’s safe-haven demand also propels USD/JPY prices. That said, US Dollar Index (DXY) extends the previous day’s recovery moves to 92.62 by the press time.

The coronavirus resurgence has been the main catalyst behind the market’s latest rush to risk safety. The northern hemisphere recently joined, unfortunately, the league of Asia-Pacific region with multi-day high infections and faster spread of the covid variant. The UK registered the highest daily cases since January the previous day while Tokyo’s infections also jumped the most in six months. Further, Australia’s extends local lockdowns amid a jump in cases while Los Angles recalled the mask mandate.

Read: S&P 500 futures drop amid spiking coronavirus cases in NSW, LA reinstates mask mandate

Elsewhere, the uncertainty over the Fed’s next moves, despite Chairman Jerome Powell’s push for no monetary policy adjustments also weighs on the risk appetite. Also, fresh US-China jitters and escalating Brexit tussles are additional factors to tear the market’s optimism.

Amid these plays, S&P 500 Futures print mild losses whereas the US 10-year Treasury yield gains two basis points (bps) to snap a two-day downtrend of around 1.31%. Further, Japan’s Nikkei 225 prints 1.0% intraday loss by the press time.

As the BOJ met market expectations, USD/JPY traders will pay close attention to Governor Haruhiko Kuroda’s comments for immediate direction. However, a comparatively major catalyst will be the US consumer-centric figures and risk-related news.

Technical analysis

A six-week-old ascending support line near 109.70, followed by the 100-DMA around 109.40, become important downside levels for the USD/JPY traders to watch during the fresh declines. Meanwhile, a downward sloping trend line from July 02 near 110.50 restricts the pair’s short-term advances.

Additional important levels

Today last price 109.99
Today Daily Change 0.15
Today Daily Change % 0.14%
Today daily open 109.84
Daily SMA20 110.57
Daily SMA50 109.88
Daily SMA100 109.37
Daily SMA200 106.88
Previous Daily High 110.09
Previous Daily Low 109.71
Previous Weekly High 111.19
Previous Weekly Low 109.53
Previous Monthly High 111.12
Previous Monthly Low 109.19
Daily Fibonacci 38.2% 109.86
Daily Fibonacci 61.8% 109.95
Daily Pivot Point S1 109.67
Daily Pivot Point S2 109.5
Daily Pivot Point S3 109.29
Daily Pivot Point R1 110.05
Daily Pivot Point R2 110.26
Daily Pivot Point R3 110.42



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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD struggles to rebound, holds near 1.1150 after US data

EUR/USD trades around 1.1150 in the early American session on Friday as investors assess the latest inflation data from the US. According to the US Bureau of Economic Analysis, Core PCE Price Index rose to 4.9% on a yearly basis in December from 4.7% in November, surpassing the market expectation of 4.8%. 


GBP/USD clings to small gains above 1.3400 on mixed US data

GBP/USD posts modest daily gains slightly above 1.3400 on Friday as the dollar rally loses steam. The data from the US showed that the core PCE inflation edged higher to 4.9% in December. On a negative note, Personal Spending contracted by 0.6% on a monthly basis.


Gold recovers modestly after US data, stays below $1,800

Gold managed to stage a rebound from the multi-week low it set below $1,780 but continues to trade deep in the red near $1,790. The benchmark 10-year US Treasury bond yield is rising more than 1% on the day after US data, limiting XAU/USD's recovery.

Gold News

Bitcoin Weekly Forecast: Federal Reserve cannot tame BTC’s uptrend

Bitcoin has experienced some significant losses over the past few weeks, with a more dramatic drop occurring this week after the Fed's decision was announced. As losses have extended and BTC has entered into the $30,000 zone, concerns regarding Bitcoin being in a bear market have increased.

Read more

Apple share price set to rise after another record quarter

With the Nasdaq closing at its lowest level in seven months yesterday, the Apple share price has also found itself on the end of the recent weakness in tech shares, down over 12% from its record highs in early January.

Read more