USDJPY broke its downtrend and then pulled back to test it again, with the support of the Fibonacci %23.6 and the BOJ meeting, it has now turned its head to the sky again. But will USDJPY surge again? Well, that is somewhat hard to guess right now.
At the first meeting with Ueda, the new chair at the helm, BOJ has committed to an ultra-loose monetary policy again. There are no changes in yield cap or rates as expected, and BOJ will ease more if needed in the future. However, the current or lower level rate guidance is scrapped, and the bank has decided to conduct a “broad-perspective review of monetary policy,” which could take a long time, according to BOJ’s statement.
Continuing ultra-loose policy and reluctance to a policy shift in the near future have fueled USDJPY today, and now, the 135 resistance is being tested. If USDJPY gains this level and can hold above it after today’s PCE data, a wave to the convergence of the middle point of the October-January fall and the upper line of the uptrend channel might begin. However, over the medium term, any upward moves can create selling opportunities because of the incoming policy change expectations, whenever it may come.
