Forex: USD/JPY tries to hold downside above 88.00

FXstreet.com (Barcelona) - The USDJPY extended its corrective movement, as the Yen rebounds from oversold conditions, and printed a low at 87.95 during the Asian session. After a quick bounce to 88.30, the pair is heading back to the psychological level of 88.00 ahead of the European session.

The current Yen momentum this week was triggered by Japan economy minister Amari's comments, saying that the JPY has depreciated to a level in line with fundamentals, and that further weakening could be harmful. Japan's Nikkei Stock Average fell the strongest in 8 months, by -2.56%. The BoJ will meet on 21/22 January to discuss, decide and announce its monetary policy. Investors will be watching closely.

"We would allow for some slippage to 87.17 then the 85.99 2 month uptrend", wrote Commerzbank analyst Karen Jones. "It remains under pinned by its cloud support on the 240 minute chart, which is currently located at 87.07/58", Jones added, expecting a bid market while above that area, and targeting 93.32.