USD/JPY reports losses as S&P 500 futures drop, Kuroda talks balance sheet taper
- Yen in demand on signs of risk aversion in the US equities.
- BOJ's Kuroda talks about ways to taper the balance sheet size.
The Japanese Yen is pushing higher against the greenback, tracking a 0.35 percent decline in the S&P 500 futures.
As of writing, the USD/JPY pair is trading at 106.42 - down 0.16 percent on the day. The fear that Trump's broader tariffs on Chinese imports could lead to full-fledged trade war could be hurting the risky assets.
Meanwhile, Bank of Japan (BOJ) head Kuroda, while speaking in parliament, reiterated that the central bank is still far from 2 percent inflation goal, but at the same time assured markets that there are plenty tools in the banks' arsenal to trim the balance sheet size without causing turbulence in the markets. Of late, Kuroda has been making subtle references to balance sheet taper.
However, so far, Kuroda's taper talk has not had a big influence on the JPY pairs.
Looking ahead - the focus remains on the action in the stock markets and China's response to tariff talk.
USD/JPY Technical Levels
A break below 106.25 (previous day's low) would open doors for a drop to 105.55 (Feb. 16 low) and 105.25 (March 2 low). On the higher side, only a daily close above 107.00 would turn the tide in favor of the bulls. The pair could then test resistance at 107.91 (Feb. 21 high) and 108.28 (Jan. 26 low).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
