USD/JPY finds bids near 109.50 despite above forecast Tokyo core CPI

• USD/JPY found bids near 109.50 a few minutes before press time and is currently trading above the 5-day MA.  
• The JPY bulls are not impressed by a better-than-expected Tokyo core CPI reading.  
• The 50-day MA is all set to cross the 200-day MA from above (death cross).  

USD/JPY is currently trading at 109.69, having clocked a low of 109.51 earlier today.  

The dip below the 5-day moving average (MA) of 109.58 was short-lived despite better-than-expected inflation numbers.  

Core consumer prices (includes oil but excludes food) in Tokyo rose 1.1 percent in January from a year earlier, beating the median estimate of a 0.9 percent increase. The headline number also ticked higher to 0.4 percent from 0.3 percent.

That, however, has failed to impress JPY bulls, which is hardly surprising as inflation is still well below the BOJ’s target of 2 percent. Moreover, the central bank revised lower its inflation and growth forecasts this week. Put simply, the Japanese central bank is unlikely to scale back the unprecedented stimulus any time soon.  

Further, the S&P 500 futures are currently reporting a 0.20 percent gain. The signs of risk-on could be adding to the bearish tone around the anti-risk JPY.  

Technically speaking, the pair could break 110.00 in the short-term, as the 50-day MA is about to cross the 200-day MA from above. That death crossover is a big-time lagging indicator and is widely considered a sign of short-term oversold conditions.  

USD/JPY Technical Levels