USD/JPY retreats on reports about BoJ exit strategy

By FXStreet The yen rose across the board after a Nikkei article suggested that the Bank of Japan is preparing to exit from the easing policy with reserves. Also the decline in stocks from daily highs gave momentum to the Japanese currency.

USD/JPY dropped 50 pips during the last hours. It peaked at 110.57, the strongest level since April 28 and then dropped finding support above 110.00. After bottoming at 110.07 it rebounded and it was trading at 110.20/25, 30 pips above yesterday’s closing price.

The impact of the report from Nikkei could be short-lived as the Bank of Japan is not likely to implement a tightening policy in the near future. Inversely, many analysts continue to see high chances of more easing.

USD/JPY up for the week

The yen is about to end the week lower, the third decline in a row. Despite rising from 105.50/60, USD/JPY still moves with a bearish bias in the long term.

To the upside, current movements could be seen as a bullish correction of the decline that had been taking place since January. If price manages to break above 112.00 – 112.60 (key resistance / 20-WMA), the US dollar could gain more momentum, signaling a …read more

Source:: FX Street