Price continues to sit just under the figure level
That comes despite the BOJ signaling to markets that it is beginning to join other central banks in taking a step back from normalising monetary policy. The central bank tempered its outlook of the Japanese economy earlier, though it was very much priced in already as the decision was forewarned last week here.
But USD/JPY is making its way back up now to 111.70 as we await BOJ governor Haruhiko Kuroda’s press conference. I would expect Kuroda to reiterate some dovish stuff surrounding the economic outlook but the key thing is that he will maintain that price momentum is still intact and that they are still on their way towards hitting the 2% inflation target.
So long as that remains the tagline, expect any reaction in the yen to be rather muted. I wouldn’t expect him to commit or communicate any potential change in policy moving forward, so all else being equal it should be a rather non-event for USD/JPY.
As it stands, the 112.00 handle remains a key resistance level for buyers and with US-China trade talks still going nowhere, it’s hard to imagine price breaking above the figure level for now.