The promote the very fact play is continuous as merchants are nonetheless digesting the BOJ financial coverage determination earlier right here. However fairly frankly, we have had loads of time to take all of it in after the quite a few leaks over the previous week. And that kind of explains what we’re seeing at present.
Sure, the BOJ has determined to finish detrimental charges. Nonetheless, it’s merely transferring short-term charges from -0.10% to between the 0.00% to 0.10% vary. Sure, the BOJ has determined to scrap yield curve management. Nonetheless, they’re nonetheless sustaining JGB purchases and can step in the place vital if yields run too excessive, too quick.
Apart from that, in addition they did not supply any ahead steerage about future coverage steps and the tempo of normalisation. That is a purple flag to me and smells like they will method it very, very slowly.
In the meantime, with Treasury yields persevering with to hold on the highs for the 12 months, it’s making it robust to discover a compelling purpose for USD/JPY to assemble a lot draw back momentum at the moment.
For now, patrons are in management because the pair runs into resistance and provides across the 150.00 mark. Thereafter, key resistance lies on the February highs across the 150.84-88 area earlier than probably revisiting the November excessive at 151.90. These will likely be key upside ranges to look at in the meanwhile for USD/JPY.