The USD/JPY pair stretched its gains to a fresh monthly high at 112.70 in the early European session before losing traction and dropped to a daily low at 112.13 at the beginning of the NA session. As of writing, the pair was trading at 112.30, losing 20-pips on the day.
The highly anticipated BoJ meeting turned out to be a non-event on Thursday. After the bank decided to leave its monetary policy stance unchanged, Governor Haruhiko Kuroda said that the BoJ would add more stimulus if needed and added that they were not looking to make any changes to ETF purchases based on stock prices. Commenting on the FOMC's hawkish statement, Kuroda said that the Fed's policy steps were appropriate.
The macroeconomic data from the U.S. failed to trigger a meaningful market reaction. According to the US Department of Labor, weekly initial jobless claims decreased by 23K to 259K for the week ending September 16 while the Philly Fed Manufacturing Index came in at 23.8, beating the market expectation 17.2. At the moment, the US Dollar Index is testing the 92 handle, extending its technical correction of yesterday's FOMC-led rise. In the meantime, following a calm start to the day, major equity indexes are struggling to push higher with the Doe Jones and the S&P 500 indexes losing 0.1%, providing no clear hints of the market sentiment.
- US: Weekly initial claims was 259,000, a decrease of 23,000 from previous week
- Philly Fed: Index for current manufacturing activity in the region increased 5 points to 23.8
Technical outlook
With today's price action, the RSI indicator on the daily graph turned south below the 70 handle, showing that the pair is leveling out its overbought readings. 112 (psychological level) could be seen as the first technical support ahead of 111.45 (200-DMA) and 110.80 (100-DMA). On the upside, technical resistances align at 112.70 (daily high), 113.50 (Jul. 14 high) and 114.45 (Jul. 11 high).
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