- The USD / JPY drops after the BOJ emergency meeting.
- The BOJ has raised fears of a viral epidemic and is ready to act.
- The American-Chinese struggle intensifies with the last declarations of the National People’s Congress.
The USD / JPY drops from 107.72 to 107.60 after the BOJ’s inaction on Friday morning. The Japanese central bank left its monetary policy unchanged at the surprise meeting while announcing AIDS targeting for small and medium-sized businesses.
BOJ responded to general market expectations of no change in short-term interest rate or target yield for Japanese government bonds (JGB) while announcing 75 trillion coronavirus loans (COVID-19).
Read: Breaking: BoJ maintains target for short-term interest rate at -0.1%
Aside from the BOJ, China’s recently worrying headlines 13e The National People’s Congress (NPC) regarding Hong Kong also weighs on the risk tone of the market.
Earlier in the day, US Senate majority chief McConnell said that continued crackdown on Hong Kong in China will heighten the Senate’s interest in re-examining the US-China relationship.
In addition, the NPC has stopped proposing any targets for next year’s GDP while pledging to implement the US trade agreement.
That said, yields on 10-year US Treasuries remain low, close to 0.675%, while the Japanese NIKKEI fell 0.18% to 20,510 at the time of publication.
Given the lack of important data on the economic calendar, traders can now keep their eyes on China’s updates for a new boost.
An ascending trend line from May 07, at 107.55 now, can control sellers during further declines while the highs marked in mid-April and May 19, around 108.10, become the key resistance.