USDJPY surges to the mid-134.00s on the BoJ’s status quo keeping an eye on it

USDJPY as the Bank of Japan sticks to market expectations of maintaining monetary policy and keeping interest rates constant.

The USDJPY gains 100 pips to 134.45 as a result of the Bank of Japan’s (BoJ) inactivity on Friday morning. Although the Japanese central bank maintained its monetary policy intact. A change in forward guidance seems to have fueled the Yen pair.

Nonetheless, the Bank of Japan maintained benchmark interest rates at -0.10% while also defending the current 0.50% range of the Yield Curve Control (YCC). As predicted. However, the BoJ also stated that they will adopt more easing measures without hesitation if needed in order to achieve market stability. Which has recently pushed up USDJPY prices. Given the central bank officials’ latest defense of cheap money policy. Which coincides with monetary policy inactivity. The USDJPY price rises following the statement.

However, there are obstacles to First Republic Bank (FRB) attitude. US debt limit issues, and hawkish Fed bets fueled by recently optimistic US inflation indications appear to be driving USDJPY buyers.

It is also worth noting that the current increase of geopolitical uncertainties surrounding China weighs. On mood and USDJPY pricing. Earlier in the day. China’s Envoy to Japan stated, “The issue surrounding Taiwan is a red line that should not be crossed.”

While expressing the mood, the S&P500 Futures remain directionless in the mid-4,100s after rising the highest in 1.5 months the previous day. Whilst US Treasury bond rates remain lacklustre after a significant recovery in the 10-year and two-year bond coupons in the last two days.

Yen traders are looking forward to Governor Ueda’s maiden news conference, as well as the economic forecast, which is expected to be hawkish.

After witnessing the initial response. In addition to the Bank of Japan’s (BoJ) monetary policy pronouncements, USDJPY traders will be watching newly appointed Governor Kazuo Ueda’s news conference, which is planned for 06:30 AM GMT. If the policymaker follows in the footsteps of previous Governor Haruhiko Kuroda, the Yen pair may rise in value.

The US Core PCE Price Index looks to be crucial ahead of the FOMC meeting next week.

Aside from the BoJ-linked triggers, the market’s concerns about banking fallouts and US default emphasize the First Republic Bank (FRB) reports and debate on debt limit expansion as key issues to monitor. Furthermore, the Fed’s favored inflation indicator, the US Core PCE Price Index for March, which is predicted to fall to 4.5% YoY from 4.6% before, might provide further insights to accurately predict the USDJPY pair’s movements ahead of next week’s Federal Open Market Committee (FOMC) monetary policy meeting.

USDJPY Technical Analysis

As the Yen pair buyers to reclaim control, a daily close above the downward-sloping resistance line from early March, at 134.50 at press time, is required. However, sellers may strengthen their grip if they see extended trading below a one-month-old support line, which is now at 133.85.

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