The Bank of Japan (BoJ) is having a monetary policy meeting, and the result of it will be unveiled on Thursday at 03:00 GMT. Yoshihide Suga has been confirmed as Japan’s new Prime Minister by Parliament but the BoJ is expected to keep the same old policy though may review outlooks. USD/JPY bearish strength is likely to prevail after central banks’ announcements, FXStreet’s Chief Analyst Valeria Bednarik reports.
“The BoJ is largely anticipated to maintain its current monetary policy, with the main rate at -0.10% and the focus on keeping the yield-curve under control. Policymakers may revise their economic outlooks, but even with an upgrade of growth and inflation figures, the event has little chances of having a significant impact in the JPY.”
“Ahead of the BoJ, the US Federal Reserve will announce its monetary policy decision. The central bank has announced a new inflation policy framework, in which it targets average inflation over time. Pretty much that means that the US policymakers won’t rush into a rate hike anytime soon, even if inflation surges above 2%.”
“The BoJ has little chances of having an impact on the JPY, but the same doesn’t go for the Fed. The US Central Bank will likely set the tone ahead of the Japanese one. A strong static support area comes around 104.70, with a break below it exposing 104.18, this year low.”
“If somehow the market finds a reason to buy the dollar, the immediate resistance is 105.50 ahead of the 106.00 figure. Still, the USD/JPY pair would need to advance beyond 106.70 to change its current negative bias.”