USD/JPY is Targeting 103.67 After the BOJ Decision
The USD/JPY bounced back after the BOJ interest rate decision and the extremely weak consumer price data. The USDJPY pair is trading at 103.50, which is substantially higher than the intraday low of 102.87.
What happened: Two major events happened earlier today. First, the Japanese statistics released the November inflation numbers. The data showed that the overall consumer prices dropped by 0.5% in November leading to an annualised decline of 0.9%. That was in line with expectations and was also the lowest figure in more than a decade. The core CPI also dropped by 0.9%.What else: Second, the USD/JPY also reacted to the final BOJ decision of the year. The bank decided to leave interest rates and the yield-curve control policy unchanged. The most notable change was that the bank extended the duration of the ongoing asset purchases to the end of September 2021. Notably, this decision came two days after the BOJ started to buy $6 billion from the country’s reserves.
USD/JPY technical outlook
What next for the USDJPY? On the three-hour chart, we see that the USD/JPY has bounced back from its lowest levels yesterday. By so doing, it is in the process of crossing the 15-period and 25-period exponential moving averages. It is also slightly below the important support level of 103.67. Importantly, it has formed a three white soldiers pattern.
Therefore, for today, it seems like bulls have the momentum to push it to the resistance at 103.67. On the flip side, a move below the support at 103.20 will invalidate this trend.