Yen Slips With Fed/BoJ Policy Divergence Seemingly Here To Stay

The yen has gone offered across the board after the BoJ's monetary policy decision announcement failed to provide any notable hawkish surprises, falling broadly in line with expectations.

• The BoJ kept all of their main policy parameters unchanged but upgraded the FY2022 & FY2023 inflation forecasts, as touted in earlier press reports. The Bank also changed their long-standing view on risks to the price outlook, noting that they are "roughly balanced." However,here were no mentions of potential for tightening further down the road in the initial communique, while the Bank struck some cautious notes on the growth outlook. Focus now turns to the presser with BoJ Gov Kuroda, due in a few hours' time.
• USD/JPY blipped higher, last sits +10 pips at Y114.73, after briefly showing above the 20-EMA at Y114.77. A clean break above that moving average would bring Jan 11 high of Y115.68 into play, with Jan 4 high of Y116.35 providing the next layer of resistance above.