USD/JPY Remains Below 102 Handle After BOJ Governor’s Speech

Talking Point:

• Bank of Japan Governor Kuroda Said Inflation to Pick Up in 2H 2014.
• USD/JPY Largely Unchanged Following the Press Conference in Tokyo.
• US Dollar Weakness Post FOMC Meeting May Keep USD/JPY below 102

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Bank of Japan (BOJ) Governor Kuroda spoke at the annual meeting of the National Association of Shinkin Banks, held in Tokyo today. He remarked at the ensuing press conference on the BOJ’s commitment to continue with the unconventional monetary easing until its 2 percent inflation target is met, which was set a year ago. He further alluded that the sales tax increase from 5 percent to 8 percent, which was enacted on April 1st, is causing some economic fluctuations. However, he reiterated that Japan’s economy was recovering moderately and inflation was to pick up in the second half of 2014.

Following the press conference, the Yen advanced slightly higher against the Greenback to trade at 101.921.

The broad-based US Dollar weakness on the back of the June FOMC Meeting may help explain the dive under 102.00 for USD/JPY in yesterday’s trading session. Technical analysis from Currency Strategist Ilya Spivak suggests the pair is currently in a narrow and choppy trading range with near term support at 101.75 and resistance at 102.35.

USD/JPY 5 Minute Chart

Chart Created Using FXCM Marketscope 2.0

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Edward Hyon, DailyFX Research Team

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