USD/JPY: Off highs, BOJ's Kuroda calls for structural reforms

USD/JPY is feeling the pull of gravity, possibly due to the losses in the S&P 500 futures.
A deeper pullback could be seen due to the Sino-US political tensions.

Omkar Godbole FXStreet Contributor

USD/JPY is currently trading at session lows near 109.46, having hit a high of 109.60 three hours ago.

The pair is pulling back, possibly tracking the slow descent of the S&P 50 futures. The index futures were down 0.10% in early Asia and are currently reporting a 0.26% drop.

Bank of Japan's (BOJ) Governor Kuroda was out on the wires a few minutes before press time calling for structural reforms. Kuroda told Parliament that structural reforms must accompany fiscal and monetary stimulus measures to heighten the economy’s long-term growth potential and added that the central bank's ultra-loose policy is aimed at boosting inflation to 2% and not monetize debt.

Kuroda's comments are not surprising as the central bank has little room to stimulate, having run an expansionary monetary policy for more than six years.

Looking forward, the Yen may continue to gain ground, as equities will likely trade risk-averse in response to the decision by President Trump to sign the Hong Kong Democracy Bill.

The case for deeper pullback looks stronger if we take into account the bearish divergence of the relative strength index on the intraday charts.

Technical levels

USD/JPY

Overview
Today last price	109.46
Today Daily Change	-0.05
Today Daily Change %	-0.05
Today daily open	109.52

Trends
Daily SMA20	108.88
Daily SMA50	108.38
Daily SMA100	107.75
Daily SMA200	108.93

Levels
Previous Daily High	109.57
Previous Daily Low	109.33
Previous Weekly High	109.08
Previous Weekly Low	108.28
Previous Monthly High	109.29
Previous Monthly Low	106.48
Daily Fibonacci 38.2%	109.42
Daily Fibonacci 61.8%	109.48
Daily Pivot Point S1	109.38
Daily Pivot Point S2	109.24
Daily Pivot Point S3	109.14
Daily Pivot Point R1	109.62
Daily Pivot Point R2	109.71
Daily Pivot Point R3	109.85

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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