USD/JPY sees little action after BOJ Summary showed split over 10-year yield target

USD/JPY is flatlined around 113.37, having defended a key trendline support on Tuesday.
BOJ summary showed the policymakers differed over the 10-year yield range.
At least one board member is calling for a wider band.

Omkar Godbole FXStreet Contributor

The USD/JPY pair is trading in a sideways manner around 113.37 in Asia, having defended a key rising trendline support for the eighth time in the last 16 days yesterday.

The Bank of Japan (BOJ) decided last month to allow the long-term yields to move at double the previous range of around minus 0.1 percent to 0.1 percent.

The summary of opinions from the last week's BOJ rate decision released earlier today revealed that one member is already calling for a wider 10-year yield range (0.25 percent up or down). A wider long-term yield range would provide more breathing space for the BOJ (less bond buying).

However, the JPY has not picked up a bid as the summary also showed discussions on whether the BOJ should ramp up its already massive stimulus. One member warned that allowing long-term rates to rise significantly could worsen the inflation outlook.

The conflicting messages have left USD/JPY at the mercy of the yield differential. At press time, the 10-year bond yield spread is seen at 286 basis points, well below the 2018 high of 305 basis points set in May.

A sharp rise in the yield spread could bode well for the USD/JPY pair.

USD/JPY Technical Levels

Resistance: 111.48 (previous day's high), 112.15 (Aug. 1 high), 113.18 (recent high)

Support: 111.30 (rising trendline support), 110.85 (50-day moving average), 109.99 (200-day moving average)

Author

Omkar Godbole

FXStreet Contributor

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

EUR/USD remains depressed below mid-1.1800s; downside potential seems limited

The EUR/USD pair attracts some sellers for the second consecutive day on Tuesday and hovers below mid-1.1800s amid a relatively quiet trading action during the Asian session. The broader fundamental backdrop, however, warrants some caution for bearish traders before positioning for deeper losses.

GBP/USD trades with negative bias, eyes 1.3600 ahead of UK jobs data

The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound and provide some impetus to the currency pair.

Gold declines as trading volumes remain subdued due to holidays in China

Gold price extends its losses for the second successive session, trading around $4,930 per troy ounce during the Asian hours on Tuesday. Gold price is trading nearly 0.7% lower at the time of writing as trading volumes stayed thin due to market holidays across China, Hong Kong, and other parts of Asia.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

US CPI is cooling but what about inflation?

The January CPI data give the impression that the Federal Reserve is finally winning the war against inflation. Not only was the data cooler than expected, but it’s also beginning to edge close to the mystical 2 percent target. CBS News called it “the best inflation news we've had in months.”

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.