- US Dollar rises even further during the American session, DXY at multi-year highs.
- USD/JPY breaks key levels, resumes uptrend.
The USD/JPY broke above the 112.00 area and jumped more than 30 pips in a few minutes, reaching at 112.35, the highest level since mid-December. The pair was holding near the top, consolidating above key technical levels.
A stronger US Dollar across the board pushed the USD/JPY to the upside. The greenback is the top performer, posting important gains also against emerging market and commodity currencies. Measured by the US Dollar Index, it is up by 0.57%, at 98.16, the highest since June 2017.
Today’s rally pushed USD/JPY above the key 112.00 resistance area, resuming the rally and ending day’s of low volatility and price action within small ranges. The current driver is being the US dollar, even despite lower US yields.
Bank of Japan meets
The Bank of Japan will announce its decision on monetary policy on Thursday. It will also release its Outlook for Economic Activity and Prices. BoJ Governor Haruhiko Kuroda will deliver a press conference later. No change in monetary policy is expected. Experts point out the BoJ could downgrade their economic assessment.
“The document is set to include yet another pushback as to when the inflation target will be reached. They have been pushing back the elusive goal into the future over and over again”, says Yohay Elam, analyst at FXStreet. According to him, the BoJ is set to leave its ultra-loose yet unsuccessful policy unchanged, pushing back the date it hopes to hit the 2% core inflation target. “On this background, investors may buy the currency, assuming the BOJ has no more tools in the shed and/or does not want to use them.”
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