USD/JPY holds above 105 after BOJ revises up economic assessment
- BOJ's status quo rate decision fails to move the needle on USD/JPY.
- The central bank upgraded language on exports and output.
- Increased post-Fed dollar demand keeps USD/JPY above 105.00.
USD/JPY keeps gains above 105.00 as Bank of Japan's decision to revise the economic assessment higher is struggling to draw bids for the Japanese yen.
The central bank said the economy is in a severe state but shows signs of life and could soon see higher output and exports. The statement added that consumption is gradually picking up; however, the consumer price index is likely to hover in the negative territory for the time being.
The bank kept interest rates unchanged at -0.1% and retained the 10-year Japanese government bond yield target of around 0%.
So far, the BOJ's positive comments on exports and output have failed to entice yen buyers. Moreover, the FX desks are paring dollar shorts on the not-so-dovish Federal Reserve policy statement released Wednesday. The US central bank kept rates unchanged but said the unemployment falling faster than the central bank expected in June.
As such, the dollar may continue to gain ground during the day ahead. Readers, however, should note that stocks have come under pressure following the Fed's statement. If the risk aversion worsens, the anti-risk Japanese yen may find bids, capping the upside in USD/JPY.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
