The USDJPY pair rose modestly on Thursday. The pair took profits as the dollar strengthened and some positioning from the outcome of the BOJ meeting. Momentum remained limited because markets do not expect a policy change before the end of the meeting, but the bank may discuss when to start reducing bond purchases.
The dollar strengthened despite a surprise drop in the US producer price index (PPI) in May, suggesting that price pressures are easing. The US Consumer Price Index (CPI) was also softer than expected in May.
The Bank of Japan (BoJ) is expected to maintain its short-term rate target between 0% and 0.1% in today meeting after concluding its two-day monetary policy review meeting for June.
It is worth remembering that in March the BoJ raised interest rates for the first time in 17 years, ending the negative interest rate policy that had been in place since 2016. With political stability widely expected at the meeting, market participants will be watching for possible changes in the policy statement for more clues as to when the next bank charge will occur.
Japan’s wholesale inflation accelerated to the fastest pace in nine months in May, data released on Wednesday showed. This suggests that a weak yen raises the cost of importing raw materials, thus putting pressure on prices.
Technical Outlook – USDJPY Forecast:
The USDJPY traded at 157.006 up 0.17%. The pair is trading near to a massive resistance at 157.4045, a break above could pave the way for further gains. The pair could test 157.8045-158.20.
Conversely, if the pair break the support 156.20, the next support would be 155.80. A breach of the latter and the pair could tumble toward the 155.55-155.25.
Happy Trading!
Commodity Samachar
Learn and Trade with Ease
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