- Bank of Japan (BOJ) offered little hawkish/dovish surprises.
- USD/JPY remains on the defensive after BOJ.
- Focus remains on treasury yields
USD/JPY continues to trade in the red near 107.60 following Bank of Japan (BOJ’s) decision to keep key policy tools unchanged.
The central bank retained the short-term interest rate target at -0.1% as expected while maintaining the 10-year Japanese government yield target around 0%. The bank reiterated that it intends to keep the current extremely low-interest rate environment at least through spring 2020 and mentioned external developments as a key risk to the Japanese economy.
All-in-all, the monetary policy statement and the rate decision offered no hawkish or dovish surprise, as expected, leaving the pair at the mercy of the developments in the US bond markets.
The 10-year US Treasury yield fell below 2 percent earlier today to hit the lowest level since 216, as the Federal Reserve opened the doors to rate cuts in the second half of this year. As a result, the greenback was offered across the board in early Asia and continues to trade on the defensive.
With treasury yields looking south, the pair looks set to print fresh session lows below the Jan. 4 low of 107.51.
Technical Levels
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