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Forex pairs in this Article » USD/JPY (Athens) – The USD/JPY lost solid ground on Kuroda’s speech – roughly 25 pips – and now is sitting on the 50-daily EMA (98.23).

USD/JPY falls as the Japanese currency strengthens on BoJ’s Kuroda speech

The USD/JPY was hovering around the 98.50 area prior to the BoJ’s Kuroda speech in Osaka. The Japanese currency was boosted on Kuroda’s speech; Kuroda mentioned that “Japanese inflation expectations are gradually rising. Briefly, real yields are falling due to BoJ's bond buying,” as well as that “Vital for FX market to move in stable manner, while it is too early to discuss an exit strategy from current easing policy.” Furthermore, BoJ’s governor said that “expects Japanese growth to surpass potential after the increase of sales taxes.” Market participants interested in the cross might consider that the cross decline - despite the positive comments on behalf of Kuroda for Japan’s economy – could attributed to a less or more extent to widening spread between Nikkei index close and Nikkei futures (roughly 55.3pts as Osaka contract sinks further).

Technical Perspective on the USD/JPY

The cross might feel safe as it remains well above the support zone as of 97.64 – 97.80 area (97.64 is where the 200-daily SMA is laying, while 97.80 is the daily low as of the 1st November). On the other hand, to move into the mid 99.00s, it should first of all overcome the handle of 99.01 (17th October daily high), as well as the 99.14 (26th September daily high). Emmanuel Ng of OCBC Bank says “…with positive risk appetite mildly supportive of the JPY-crosses, the next USD-JPY resistance around 99.00 remains in sight despite the less than hawkish tone from Fed rhetoric yesterday.”
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