JPY weakened as the BoJ pledged to keep interest rates very low, currently remaining on hold at -0.10%. The bank also intends to maintain a long term yield target around zero and to make its policy framework more flexible, reflecting the forecast that it would take time for inflation to reach its 2% target. However, the bank also added that long term interest rates may fluctuate depending on economic and price developments. USD/JPY rose on the news, reflecting the weakening of the JPY which could continue to set the mood for the near term.
USD/JPY rose and tested the 111.30 resistance line during today’s Asian session, however corrected somewhat quite quickly. We could see the pair having some bullish tendencies today as the financial releases could favor the USD side. It should be noted though that to remove our sideways bias, we would require a clear breaking of the 111.30 resistance line. Should the bulls take over the market we could see the pair breaking the 111.30 resistance line and aim for the 112.05 resistance level. Should the bears take over the market we could see the pair aiming if not breaking the 110.75 support line.
