“¢ BoJ maintains status quo and lowers inflation/GDP growth forecasts.
“¢ Bulls seemed unimpressed by dovish comments by the BoJ Governor.
“¢ A modest USD pullback adds to the selling bias ahead of the US macro data.
The USD/JPY pair held on to its offered tone below the 112.00 mark and had a rather muted reaction to the BoJ Governor Haruhiko Kuroda opening remarks at the post-meeting press conference.
After yesterday’s late pullback from fresh YTD tops, the pair came under some renewed selling pressure on Thursday and failed to capitalize on the BoJ’s decision to maintain status quo. The Japanese central bank left interest rates unchanged at -0.10% and said to it would keep rates extremely low until at least 2020.
The key monetary stimulus settings to purchase JGBs at an annual pace of around 80 trillion Yen and maintain the 10-year yield target at 0.00% were also left unchanged. Further, the BoJ lowered its median CPI and GDP forecast for the fiscal year 2020-21, albeit failed to impress the bulls and provide any meaningful impetus.
Meanwhile, dovish comments by the BoJ Governor Haruhiko Kuroda, at the post-meeting press conference, also did little to ease the bearish pressure, with a modest US Dollar pullback from 22-month lows further collaborating to the prevalent selling bias surrounding the major.
It would now be interesting to see if the pair is able to attract any buying interest at lower levels as market participants now look forward to today’s important release of durable goods orders data from the US, due later during the early North-American session, in order to grab some meaningful trading opportunities.
Technical outlook
“The bull flag breakout confirmed yesterday failed to accelerate the preceding bullish move from 110.84 to 111.17 (pole). A failed breakout is as good as bearish reversal confirmation. As a result, the spot could find acceptance below 111.65 and drop all the way back to 111.65. The bearish case, however, would weaken if the pair again bounces up from the rising trendline, clearing the resistance at 112.17″, writes Omkar Godbole – FXStreet’s own Analyst and Editor.
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