- USD/JPY doesn’t Move
- BoJ maintains monetary policy
- More easing expected if COVID-19 continues
Bank of Japan has provided its decision on the routine policy meeting, and there was not much change to the current monetary policy.
BoJ keeps monetary policy unchanged
This has left the USD/JPY unaffected as the BoJ decided to maintain the near-term interest rate target at -0.1% and keeping the yield curve of the 10-year government bonds at around 0%. In the process, the yield may move downward or upwards, depending on developments in prices and economic activity.
The central bank indicated that it will continue with QQE while maintaining the yield curve and then achieving a 2% stability price target. Also, forward guidance on the rates will remain unchanged as the BoJ anticipates the near-term and long-term rates to remain.
In its quarterly report, the BoJ indicated that inflation expectations are oscillating on a weak note with the country’s price and economic outlook inclined to the downside. Because of growing caution about the pandemic household activity is still restrained.
According to reports, recent surge in COVID-19 cases in Tokyo might push the government to raise the highest alert level. Interestingly BoJ is optimistic that the economic outlook will improve later this year, and recovery will be moderate once the COVID-19 cases subside. With the impact of the pandemic on global oil prices, fading inflation will likely accelerate gradually. For now, prices and the economic outlook are uncertain because they could change depending on the pandemic’s impact.
JPY/USD technical analysis
Time : 15-07-2020
Pivot : $107.32
Technical View : Long above $107.57
Targets : $107.61 – $107.65 – $107.72 – $107.79
Comments : Weak bearish
Last Price : $106.98
Technical View : Short below $107.12
Targets : $106.99 – $106.92 – $106.85
The USD/JPY remained unchanged following the monetary policy statement from BoJ and has continued to get a run past 107 levels. Concerns of raising the COVID-19 alert levels in Tokyo could affect the movement on the pair. Downbeat forecasts are expected to help the currency pair to refresh its monthly highs.