USD/JPY struggle to break above 112.00 continues; BOJ Kuroda up next

Technical Analysis

Author: Justin Low | usdjpy

Price continues to sit just under the figure level

USD/JPY D1 15-03
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.

USD/JPY held steady around 111.70 on the decision but fell to a low of 111.49 after North Korea is reported to consider suspending nuclear talks with the US. I don't think the decision comes as much of a shock after talks broke down in Hanoi at the start of the month.

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.

However, upside momentum is still being sustained as equities are faring better so that may just see the pair trapped in a 111.50-00 range until we get further clarity from US trading later today.

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