USD/JPY: BOJ rescues the JPY bulls, eyes on 112.50

The Japanese yen continues to get hammered by its American counterpart in the European session, as dovish BOJ policy outcome combined as well as Governor Kuroda’s remarks during the press conference, continue to undermine the sentiment around the Yen.

The BOJ left its monetary policy settings unadjusted, although scaled back its CPI target for the sixth time, hinting that the ultra-easy monetary policy era is here to stay for some time.

Moreover, the safe-haven Yen also got sold-off into persisting risk-on trades, after the European indices joined the rally in global equities. Wall Street indices trade at new record highs, while the Asian markets hit near-decade highs today.

Also, resurgent demand for the greenback across the board amid increased nervousness ahead of the ECB policy decision and approval of the US fiscal 2018 budget plan, offers fresh impetus to USD/JPY.

Data-wise, we have the US jobless claims and Philly Fed manufacturing index, which could provide near-term trading opportunities for the spot.

USD/JPY Technical levels                 

To the topside, a daily close above 5-DMA at 112.27 would shift risk in favor of a re-test of 112.83/92 levels (20 & 10-DMA), beyond which 113.50 would be back on sight. A break below 111.78 (daily low) would open doors for 111.56/45 (multi-week lows/ 100-DMA). A break lower would yield a test of 111.00 (psychological levels).