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Bank of Japan Monetary Policy Statement overview

The Bank of Japan (BoJ) will be dropping their latest Monetary Policy Statement, along with their latest Interest Rate Decision and an ensuing Press Conference to be chaired by the BoJ’s chairman, Haruhiko Kuroda. The BoJ, deeply embroiled in an excessive quantitative easing model, is unlikely to be budged from their current stance on interest rates any time in the near future, and markets will be watching the Monetary Policy Statement release closely to see what, if any, adjustments will be made to the Japanese central bank’s current strategy for trying to spur inflation growth within Japan’s own economy.

After making several key adjustments, including allowing the 10-year government  bond yield to widen to 0.2%, the BoJ is unlikely to engage in much further activity immediately; media outlets may ask Kuroda about a further widening of bond yield targets, but the BoJ chairman is likely to remain non-committal in his statements.

How could it affect the  USD/JPY?

The Dollar-Yen pairing is poised to take another step higher as long as broader market sentiment remains on the rails, and as  FXStreet’s own Valeria Bednarik pointed out, the USD/JPY is “at risk of extending its advance after breaching August high at 112.14, now the immediate support level. In the 4 hours chart, the pair continues moving away from its 100 and 200 SMA, with the shortest gaining upward traction, currently at around 111.45. In the mentioned chart, the Momentum indicator eases within positive territory, as a result of the pair being unable to surpass its previous high, but given that it remains near daily highs, and the RSI maintains gains around 65, the overall risk leans to the upside.”

Support levels: 112.15 111.80 111.45      

Resistance levels: 112.60 112.90 113.20

Key notes

USD/JPY analysis: bullish potential rises on break above 112.14

USDJPY: Resumes Uptrend, Eyes The 112.61 Resistance Zone

About the Bank of Japan Monetary Policy Statement  

An official monetary policy statement is released by the Policy Board of the Bank of Japan. By communicating the committee ´s vote outcome regarding interest rates and other policy measures as well as the economic conditions influencing their decision, the statement gives clue to future changes in monetary policy.

About the Bank of Japan Interest Rate Decision

BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.

About the Bank of Japan Press Conference

Kuroda, BoJ’s governor, will give a press conference in order to communicate with investors regarding monetary policy. He talks about the factors that affected the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy.

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