USDJPY at 7th month high after BOJ decision. It’s likely to jump again

USDJPY at 7th Month High After BOJ Decision. It's likely to jump again

The Japanese yen erased some early losses after the Bank of Japan (BoJ) kept monetary policy unchanged. As expected, earlier today. But currency remained close to seven-month lows against the dollar.

The BOJ left interest rates unchanged at record lows at -0.10%. And said it will continue with its yield curve control policy for the near future to support economic growth. The bank also predicted that the Japanese economy would grow above normal this year.

The bank directed 10-year Japanese Government Bond (JGB) yields while maintaining the short-term interest rate objective at -0.1%. The band of +/-0.50%, per the latest monetary policy meeting update. The Japanese central bank also tames inflation fears by saying that the Consumer Price Index (CPI) is around 3.5%. Recently owing to pass-through effects.

A dovish BOJ was anticipated, which put significant pressure on the yen recently. The difference between U.S. and Japanese interest rates has been growing as the Federal Reserve has been sending out some relatively hawkish signals.

Yesterday, USD/JPY sparked to 141.506, the highest level since November 2022. After traders made a distinction between the Federal Reserve’s hawkish commentary and what the Bank of Japan is expected to say next.

Focus is now shifted to the conference by BOJ Governor Kazuo Ueda for more cues on the path of monetary policy. And Japanese inflation, which is still trending well above the BOJ’s target range.

Technical Outlook:

Since the start of June 2023, USDJPY turned bullish and continued trading in the upside zone. Pair has gained nearly 1%. Yesterday, after hitting a seven-month high of 141.506, and settled at 140.747, up 0.34%.

Today, the pair is trading at 140.73, up 0.34%.

The USDJPY pair is trading above the bullish continuation pattern, which still indicates bullish momentum. The pair is expected to test 140.89-141.20.

On the downside, immediate support will be 139.80-139.55. Further, RSI conditions are also favourable for the bullish momentum.