It is one of those days for the Japanese yen and it all started with a leaked report overnight that the BOJ could perform a tweak to its yield curve control settings. That culminated with a slight adjustment announced today, but not before some confusion as the the central bank kept its target band still at +/- 0.50% from zero.
USD/JPY saw a major whipsaw earlier with the high touching 141.07 and the low hitting 138.05 after the BOJ policy decision. The rise then fall continues to reflect some indecision among traders, before we are seeing a decent push higher now. The pair is up 0.3% to 139.80 levels again but conditions are extremely volatile.
When all is said and done though, the 140.00 mark remains a pivotal one to watch in managing gains and any upside rebound in USD/JPY.
The 200-hour moving average is seen at 140.25 before the 100-hour moving average is seen at 140.62 currently, and those are also key near-term levels to be mindful about in identifying the near-term bias for the pair.
For now, the volatility swings are making it tough to read into the price action. Yen bulls would've hoped for a more bold and courageous BOJ to seal the deal but that is not the case.
The BOJ is fearful of not doing anything on the inflation front, so they are hiding it behind a move of raising the 10-year JGB yields target to 1.00%. However, they are trying to be implicit about it instead of explicitly making such a call. That's not a great deal of confidence but hey, at least it is something. But I'm sure the yen bulls would've been hoping for more.
