USD/JPY daily chart
The sell the fact play is continuing as traders are still digesting the BOJ monetary policy decision earlier here. But quite frankly, we’ve had plenty of time to take it all in after the numerous leaks over the past week. And that sort of explains what we’re seeing today.
Yes, the BOJ has decided to end negative rates. However, it is merely moving short-term rates from -0.10% to between the 0.00% to 0.10% range. Yes, the BOJ has decided to scrap yield curve control. However, they are still maintaining JGB purchases and will step in where necessary if yields run too high, too fast.
Besides that, they also didn’t offer any forward guidance about future policy steps and the pace of normalisation. That’s a red flag to me and smells like they are going to approach it very, very slowly.
Meanwhile, with Treasury yields continuing to hang at the highs for the year, it is making it tough to find a compelling reason for USD/JPY to gather much downside momentum currently.
For now, buyers are in control as the pair runs into resistance and offers around the 150.00 mark. Thereafter, key resistance lies at the February highs around the 150.84-88 region before potentially revisiting the November high at 151.90. Those will be key upside levels to watch at the moment for USD/JPY.