In case you missed it, Eamonn had the headlines earlier:
- Monday morning FX open early indications - 19 Dec 2022 (BOJ chatter boosting yen)
- Weekend report on BOJ's 2% inflation target: "more flexible" (ps. not until April 2023)
- Further reports of revisions to the BOJ target for 2% inflation
The government did try to deny the reports via Matsuno here, but it's a soft one and the rumours wouldn't be swirling if there isn't some truth to them. That tends to be the case when it comes to Japan and the BOJ at least.
For now, it's the relative uncertainty that is causing markets to be a little more nervous - in case the BOJ decides to move away from its ultra dovish stance and onto a more hawkish pivot. As for the reports, there are no suggestions yet as to what the changes could be but with rising inflation pressures, the likelihood is for lawmakers and policymakers to try and address that.
USD/JPY is now down 0.4% to 136.15 as the opening gap lower is defended still by the 200-day moving average (blue line):
The topside push late last week failed to get above the recent resistance from the 23.6 Fib retracement level at 137.94 and that remains the key level to watch if buyers are to try and claim an upside break.
Otherwise, we might see price action caught in a bit of a tussle between the two key levels for now. Further support is then seen closer to 135.00 and then the 2 December low at 133.61. There is also some near-term resistance in the form of its 100 and 200-hour moving averages for today, seen at 136.31 and 136.55 respectively now.
