USD/JPY: 25-pip range play continues after Kuroda’s comments

• USD/JPY lacks a clear directional bias, with the US 10-year yield sidelined at 1.08%. 
• BOJ’s Governor Kuroda said inflation could remain low for the time being.

USD/JPY remains locked in a narrow range of 103.75 to 104.00 for the 14th straight hour, with the Bank of Japan (BOJ) Governor Kuroda offering mixed views on the Japanese economy. 

“Japan’s economy picking up although in the severe state due to impact from coronavirus pandemic,” Kuroda said while speaking at a meeting of branch managers. 

Kuroda added that consumer prices could fall for the time being and gradually accelerate and expressed willingness to provide more easing if needed. So far, Kuroda’s comments have failed to move the pair out of its multi-hour trading range of 103.75 to 104.00. 

The pair’s recovery from the Jan. 6 low of 102.59 ran out of steam above 104.00 on Monday after the US 10-year Treasury yield’s ascent stalled at the 10-month high of 1.18%. The yield has retreated to 1.08% since then, weakening the bid tone around the US dollar. 

The US President-elect Joe Biden is expected to announce additional fiscal stimulus on Thursday. That could revive the rally in both the yields and USD/JPY. 

Technical levels