- USD/JPY quickly reversed an early dip to 100-hour SMA support.
- Bulls took cues from some follow-through USD buying interest.
- The key focus will remain on the last BoJ decision on Thursday.
The greenback buying interest picked up some pace in the last hour and pushed the USD/JPY pair to fresh session tops, around the 109.55-60 region.
The pair managed to reverse an early dip to 100-hour SMA support near the 109.40 region and managed to regain positive traction on the back of some follow-through US dollar buying interest through the mid-European session on Wednesday.
Stronger USD remained supportive
The USD added to the overnight gains led by upbeat data and some hawkish comments by Dallas Fed President Robert Kaplan, reiterating that interest rates will be kept on hold unless there is a turnaround in the US economic outlook.
This coupled with a mildly positive tone around equity markets weighed on the Japanese yen’s perceived safe-haven status, which helped shrug off a weaker tone surrounding the US Treasury bond yields and remained supportive.
It will now be interesting to see if the pair is able to capitalize on the move or once again fails near the 109.70-75 supply zone – multi-month tops set earlier this December and retested last Friday amid empty US economic docket.
Moving ahead, market participants now look forward to a scheduled speech by Chicago Fed President Charles Evans, which might influence the USD price dynamics and produce some short-term trading opportunities.
The key focus, however, will be on the latest Bank of Japan (BoJ) monetary policy update. The BoJ is scheduled to announce its decision during the Asian session on Thursday and should provide some meaningful impetus.
Technical levels to watch
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