USD/JPY Bounces-Off a Dip Below 109.00 on BOJ’s Sato
The USD/JPY pair witnessed some aggressive selling last minutes, after the yen regained poise on the back of optimistic remarks on the Japanese economic outlook from the BOJ board member Sato.
USD/JPY breaches 50-DMA support at 109.21
The Japanese currency extends gains versus its US counterpart for the third consecutive session as Abe’s sales-tax hike delay decision combined with the latest comments from BOJ official Sato keep the bids for the domestic currency underpinned.
BOJ’s Sato noted that the Japanese economy may avert recession, while adding that “it's unnecessary to persist in hitting 2% inflation target at all costs.”
The major dropped sharply below 109 handle to hit fresh eleven-day lows, before recovering some ground and now regains 109 handle amid widespread risk-aversion in the markets as tumbling Japanese stocks offer support to the yen’s rise. At the time of writing, USD/JPY recovers to 50-DMA support-turned resistance near 109.20, still down -0.30% on the day.
Amid persistent broad based US dollar weakness, markets now await the US ADP jobs data to provide some respite to the USD bulls ahead of the crucial US payrolls data due tomorrow.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 109.69/78 (20-DMA/ daily pivot). A break above the last, the major could test 110 (round number/ 10-DMA). While to the downside, the immediate support is seen at 108.70 (May 18 Low) and below that at 108.50 (psychological levels).