USD / JPY Hits Session High of 107.59
The yen softened the BOJ’s announcement calling for a meeting on Friday to discuss new measures to provide funds to the financial system.
Despite possible concerns about the liquidity constraints faced by banks, the fact that Kuroda had previously anticipated this and that the BOJ specifically points to this helps to alleviate some concerns in this regard.
As such, I would not say that this is going to be something major for the BOJ or that something in the system has gone horribly wrong.
We have already seen other central banks intervening with similar measures, so the BOJ takes a page from the manual. Not waiting until June could mean they choose to be overly cautious or that they have justified concerns in the market.
I think investors will give them the benefit of the doubt, at least for the time being.
As for the reaction of the yen, it seems rather jerky. Of course, this is added to the list of central bank policy easing measures, but that does not mean that this is an unprecedented step in this environment when we have already seen d ‘other central banks do the same.
For the USD / JPY, the upward movement is encountering resistance from the trend line, the region around 107.40-50 also proving a little sticky to limit gains.
Buyers keep short-term control and the 200-hour MA (blue line) remains the key line in the sand in this regard. That said, the mood shift at risk of being more careful now doesn’t really help during the session.
As such, it may seem like the USD / JPY needs a bigger boost to try to break through the short term levels highlighted before pushing to its 107.77 high last week.