USD/JPY: Yen Jumps Over 2% as BOJ Keeps Policy Steady
The USD/JPY pair
slumped fresh weekly lows below 109 handle after the BOJ disappointed
by markets big time by keeping its monetary policy setting unadjusted.
USD/JPY sees a 200-pips fall
The yen jolted nearly 200-pips higher versus the American dollar in a knee-jerk reaction to the BOJ policy announcement, as the central bank keeps monetary policy steady, maintains 80 trln Yen base money target and 0.1% negative interest rate. USD/JPY plunged to fresh one-week lows of 108.78 immediately after the BOJ decision, before recovering some ground to now trade around 109.25, still down –2.03% on the day.
The Japanese currency received a huge boosts as markets were expecting more easing from the BOJ in wake of the recent appreciation in the yen against the greenback and underlying subdued price trends. However, markets were disappointed as BOJ decided to adopt loan support programme only for banks in areas hit by southern Japan quake.
Markets now assess the BOJ policy statement and await BOJ Chief Kuroda’s presser for more insights on today’s monetary policy stance.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 110 (round number). A break above the last, the major could test 110.41/50 (daily S2/ psychological levels). While to the downside, the immediate support is seen at 108.78 (post-BOJ low) and below that at 107.81 (Apr 18 Low).