The yen starts the week with a price gap of 1%
The movement was explicitly due to BOJ latest statements on the course of their monetary policy
The BOJ to discontinue the negative interest rate policy once they achieve their 2% inflation target
Japan to continue its widespread purchase of government bonds
Starting of the week, the Japanese yen rose against several major currencies, increasing by around 1% against the US dollar. This surge was mainly influenced by statements made by the Governor of the Bank of Japan, Kazuo Ueda, which raised expectations of a potential change in the country's monetary policy.
Governor Ueda stated that the central bank might consider ending its policy of negative interest rates once they achieve the 2% inflation target. Additionally, he mentioned that by the end of the year, the BOJ could gather enough data to evaluate whether adjustments to monetary policy, including discontinuing negative interest rates, are appropriate.
It's important to note that after their meeting in July of last year, the BOJ stated that it was currently suitable to maintain the existing monetary policy unchanged to support the country's economic recovery. They reiterated their commitment to extensive purchases of government bonds and expressed readiness to implement further easing measures if necessary.
The US dollar started the day with a significant drop against the Japanese yen, with the USD/JPY pair trading around 146.06 yen, marking a drop of approximately 1.16%.
The USD/JPY pair successfully touched resistance of 147.80 but failed to break above, retreating back to the lowest price around 145.90. Indicating a possibility of extending a correction to test the support level at 144.40. If so, further downward movement may lead to a test 141.60.
However, if the pair managed to break the 147.80, it could contribute to further upward momentum, potentially testing the next resistance level around 149.00.