- USD/JPY trades near 103.53 versus 103.67 early Thursday.
- BOJ keeps key policy tools unchanged, revises 2020 growth forecasts lower.
Bank of Japan's (BOJ) status quo rate decision and downward revision of current economic assessment struggles to elicit a reaction from yen traders, leaving USD/JPY sidelined above 103.50.
The Japanese central bank has kept interest rates unchanged at -0.1% and retained the 10-year yield target at about 0%. However, the bank has revised the gross domestic product (GDP) target for the fiscal year 2020 to -5.6% from the previous projection of -5.5%.
Other key points
Japan's economy is likely to follow an improving trend.
BOJ sees the fiscal year 2021 GDP forecast at 3.9% vs. 3.6% previously.
The bank projects a core CPI of 0.5% in the fiscal year 2021 versus 0.4% previously.
The bank will purchase the necessary amount of Japanese bonds without setting an upper limit so that 10-year JGB yields will remain at around 0%.
The rate decision and policy statement offer no hawkish/dovish surprises. As such, USD/JPY is barely moving.
The pair will likely drop below Wednesday's low of 103.45 if the US treasury yields decline, putting pressure on the dollar. The 10-year yield is currently sidelined near 1.08%, having risen from 0.90% to 1.18% earlier this month.
Investors are expecting the new US President to deliver a bigger spending package in follow-through to the recent announcement of the $1.9 trillion stimulus package. As such, most investment banks foresee a drop in the US dollar.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Latest Forex News
Editors’ Picks
EUR/USD: ECB and US Treasury yields to make it or break it
The EUR/USD pair fell to a fresh 2021 low at 1.1892 this week, ending with a handful of pips above this level. The dollar soared across the board following comments from the head of US Federal Reserve Jerome Powell.
GBP/USD: Dollar bulls taking over
The British Pound was among the best performers against the greenback, surging above the 1.4000 level for the first time this week. Soaring US Treasury yields after Powell’s speech sent the dollar skyrocketing. GBP/USD struggling around 1.3900 and at risk of falling further.
Gold still eyes June 2020 lows at $1670 after weekly closing below $1700
Weekly closing below $1700 keeps the XAU/USD sellers hopeful. A bounce towards 50-SMA on 4H cannot be ruled out in the near-term. RSI stays bearish while gold holds within a potential falling wedge.
Ethereum price primed for a swift recovery as the network prepares for a major update in July
Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.
US Dollar Index pushes higher to 92.20 on stellar Payrolls
The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).