USD/JPY: On track to close in the middle of its 50-pip weekly range below 112
- USD/JPY fails to find direction this week.
- BOJ cuts its purchases of bonds with maturities between 10 and 25 years.
- Housing starts and building permits decline in the U.S.
The USD/JPY pair remains frozen below the 112 handle in the NA session and there is no reason for it to make a meaningful move as investors are already enjoying the Easter holiday. In fact, the pair is trading in the middle of its extremely tight 50-pip weekly range, reaffirming the pair's indecisiveness.
Earlier today, the Bank of Japan announced that it cut its purchases of bonds with maturities between 10 and 25 years by ¥20 billion to ¥160 billion, but failed to get a reaction from the market as that move is seen as a part of the bank's strategy to keep the benchmark yield near zero levels.
Next week, the BoJ will be announcing its monetary policy decisions and publishing the first quarter outlook report. According to Reuters' poll of 17 economists on the BoJ's policy stance, no changes are expected. “The BOJ will retain its massive stimulus as well as the short-term interest rate target at minus 0.1 percent, while also maintaining its pledge to guide 10-year government bond yields around zero percent at its April 24-25 meeting," Reuters said.
On the other hand, today's data from the U.S. showed that housing starts and building permits in March declined to fall short of the market expectation for a modest rebound in both data following February's contraction. However, the thin trading volume allowed the US Dollar Index to stay calm above the 97 mark. On Monday, Chicago Fed's National Activity Index and existing home sales data from the U.S. will be looked upon dor fresh impetus.
Key technical levels
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
