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JPY: USD/JPY Eyeing Another Test Of Key Support Levels Post BoJ

JPY
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USD/JPY is continuing to track lower as the market digests the BoJ outcome. We were last 155.15/20 near session lows. Downside focus will rest on the high 154/low 155.00 region. the 50-day EMA is just above 155.00, while 154.64, is a trendline drawn from the Sep 16 ‘24 high. A break sub these levels is likely to signify a deeper correction in the pair. 

  • The BoJ hiked 25bps as expected, but the combination of expressing confidence in realizing the outlook, which would prompt further rate rises, along with higher inflation forecasts, has left hawkish impressions on the market.
  • JGB yields are higher, which is helping push US-JP yield differentials low. The 2yr spread back near +354bps is close to recent lows. The 10yr differential was around +340bps.
  • Ueda's press conference coming up in a few hours will be the next focus point. If we hear more caution from the BoJ Governor USD/JPY may push higher, but today's policy outcome has still left a clear impression of further rate rises.
  • Broader USD tones are also softer, with the BBDXY down 0.35% to sub 1297.30. The earlier Fox News interview with US President Trump stating he would rather not use tariffs on China, which has weighed on dollar sentiment. 

 

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USD/JPY is continuing to track lower as the market digests the BoJ outcome. We were last 155.15/20 near session lows. Downside focus will rest on the high 154/low 155.00 region. the 50-day EMA is just above 155.00, while 154.64, is a trendline drawn from the Sep 16 ‘24 high. A break sub these levels is likely to signify a deeper correction in the pair. 

  • The BoJ hiked 25bps as expected, but the combination of expressing confidence in realizing the outlook, which would prompt further rate rises, along with higher inflation forecasts, has left hawkish impressions on the market.
  • JGB yields are higher, which is helping push US-JP yield differentials low. The 2yr spread back near +354bps is close to recent lows. The 10yr differential was around +340bps.
  • Ueda's press conference coming up in a few hours will be the next focus point. If we hear more caution from the BoJ Governor USD/JPY may push higher, but today's policy outcome has still left a clear impression of further rate rises.
  • Broader USD tones are also softer, with the BBDXY down 0.35% to sub 1297.30. The earlier Fox News interview with US President Trump stating he would rather not use tariffs on China, which has weighed on dollar sentiment.