USD/JPY remains trapped in a contracting triangle after status quo BOJ

• BOJ’s status quo rate decision has failed to move the needle on JPY.  
• USD/JPY is trapped in a contracting triangle on the 4-hour chart.  

USD/JPY is barely moving in response to the status quo BOJ rate decision and remains stuck in a contracting triangle, as seen on the 4-hour chart.  

The Bank of Japan (BOJ) maintained the short-term interest rate at -0.1 and kept the 10-year yield target unchanged around 0%, as expected.  

The policy statement reiterated the age-old message that interest will remain at current or lower levels for a prolonged time so that the economy remains on track to reach the 2 percent inflation target.  Further, the central bank reiterated a willingness to do more (easing) if required.  

All in all, the policy statement offered little hawkish or dovish surprise, leaving the JPY pairs largely unaffected.  

The USD/JPY pair is currently trading at 109.57, down just three pips from the level of 109.60 seen ahead of the rate decision.  

The pair backed off from session highs above 109.65 reached earlier today after the US House of Representatives impeached President Trump.  

The decline from session highs, however, has stalled, as Trump is expected to survive the Senate.  

From the technical perspective, the pair is currently stuck in a narrowing price range and is lacking a clear directional bias.  

A breakout, if confirmed, would imply a resumption of the rally from the December low of 108.46 and could yield a rally to 110.00. On the flip side, range breakdown will likely allow a re-test of support at 109.20-109.00.  

Technical levels