USD/JPY Remains Weak Amid BOJ Concerns
In case you missed it, Eamonn had the following news earlier today, which helped to push the yen higher in trading:
This just adds to the bond market's pressure, with 10-year Japanese government bond rates remaining near the 0.50% level since the end of last week. To summarise, there is rising concern and anticipation that the BOJ may deliver another surprise or will gradually begin to alter policy later this year.
The previous report today casts some doubt on next week's policy meeting, at which the BOJ is expected to lift inflation estimates - especially after Tokyo CPI rose to its highest level since April 1982, keeping over the central bank's 2% target for the seventh month in a row.
Since the collapse last week, we've seen pricing move toward the lower end of its recent consolidation. There have been oscillations in and around its 100-hour (red line) and 200-hour (blue line) moving averages, but the pair stays more contained between crucial support around 130.00 and daily resistance around 134.45-50 as well as the 135.00 level in the larger picture.
As we await the US CPI statistics later today and the BOJ policy meeting decision next week, these will continue to define and restrict risks for both buyers and sellers.
In the case of the latter, investors may be dissatisfied with the central bank's lack of action following last month's policy change. But, given how things are gradually setting up for such an occurrence, I don't anticipate the yen to fall very much.