USD/JPY: Fell Back for Re-Test of 107.60 - BTMU
Analysts at Bank of Tokyo Mitsubishi explained that the yen has
strengthened sharply following the BoJ’s “surprise” decision to leave
monetary policy unchanged.
"Our analysts in Tokyo had correctly cautioned that the BoJ were unlikely to ease policy further so the decision was not entirely a surprise.
However, it is clear that the BoJ has chosen to disappoint market expectations for easing which had stepped up late last week following the release on Friday of a Bloomberg report suggesting that the BoJ were considering lowering the interest rate on reserves and introducing a negative rate on the BOJ’s Support for Lending program."
"The report proved misleading as Governor Kuroda stated in the press conference that the BoJ did not even discuss introducing a negative rate on the BOJ’s Support for Lending program.
As a result, it is not surprising that USD/JPY has quickly reversed the temporary spike higher to the 112.00-level and is now falling back towards a likely retest of the recent lows at around 107.60."