The drag lower in the Japanese yen after the BOJ policy decision is leading to some interesting technical moves today. USD/JPY is coming close to retesting the 135.00 mark while we are seeing EUR/JPY above move up to retest its October high of 148.40 on the day.
The pair had run up earlier this week to test the key technical resistance level but sellers held their ground, with bond yields turning lower after also helping to keep a lid on things.
But with the yen weakening now, it brings back another contest at the key technical level ahead of the weekend.
Break above that and buyers will be afforded some room to head towards the December 2014 highs around 149.50-78 next. However, if sellers can maintain their resolve, then we might see a further consolidation at the highs here for a bit.
This has been a pair that is seeing good volatility so far this year. For one, we are seeing plenty of shifts in the ECB narrative and now they are arguably one of the more hawkish major central banks. As such, the policy divergence does work in favour of the euro - as it has over the past month.
Meanwhile, the banking turmoil did help to see the yen recover some poise in March trading though the pair was largely defended on the daily chart at the 140.00 mark amid all the volatility.
