USD/JPY spikes to fresh daily top, retakes 150.00 mark after BoJ policy decision

USD/JPY attracts fresh buying on Tuesday and draws support from a combination of factors.
Hawkish Fed expectations, along with elevated US bond yields, help revive the USD demand.
The JPY weakens after the BoJ changed the language around YCC and maintained ultra-low rates.

Haresh Menghani FXStreet

The USD/JPY pair regains positive traction during the Asian session on Tuesday and snaps a two-day losing streak to the 148.80 area, or a two-week low touched the previous day. The buying interest picks up pace after the Bank of Japan (BoJ) announced its policy decision, pushing spot prices to the 150.00 psychological mark, or a fresh daily high in the last hour.

The Japanese central bank refrained from altering its yield curve control (YCC) policy, though changed language around the target range for the benchmark 10-year yield. The BoJ decides to keep the yield target but make 1% a reference cap. The move comes on the back of pressure from a sell-off in bond markets through October, which had lifted the yield on the 10-year JGB to a 10-year peak earlier this Tuesday. The BoJ, however, maintained its ultra-low interest rates despite an uptick in Japanese inflation. This continues to weigh on the Japanese Yen (JPY) and lends support to the USD/JPY pair.

The US Dollar (USD), on the other hand, attracts some dip-buying and recovers a part of the overnight slide amid elevated US Treasury bond yields, bolstered by expectations that the Federal Reserve (Fed) will stick to its hawkish stance. In fact, the markets seem convinced that the US central bank will tighten its monetary policy further in the wake of the resilient economy and still sticky inflation. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the upside, though bulls might wait for BoJ Governor Kazuo Ueda's post-meeting presser before placing fresh bets.

The market attention will then turn to the US economic docket, featuring the release of the Chicago PMI and the Conference Board's Consumer Confidence Index, due later during the early North American session. The focus, however, will remain glued to the outcome of the highly-anticipated two-day FOMC monetary policy meeting, scheduled to be announced on Wednesday. Investors will look for cues about the Fed's future rate-hike path, which will play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price	149.92
Today Daily Change	0.82
Today Daily Change %	0.55
Today daily open	149.1

Trends
Daily SMA20	149.48
Daily SMA50	148.25
Daily SMA100	145.35
Daily SMA200	139.97

Levels
Previous Daily High	149.86
Previous Daily Low	148.81
Previous Weekly High	150.78
Previous Weekly Low	149.32
Previous Monthly High	149.71
Previous Monthly Low	144.44
Daily Fibonacci 38.2%	149.21
Daily Fibonacci 61.8%	149.46
Daily Pivot Point S1	148.65
Daily Pivot Point S2	148.2
Daily Pivot Point S3	147.6
Daily Pivot Point R1	149.7
Daily Pivot Point R2	150.3
Daily Pivot Point R3	150.75

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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