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BoJ’s Ultra-Loose Monetary Policy Continues to Support USD/JPY Pair

The USD/JPY pair quickly rose above 134.750 in the Asian session following the Bank of Japan's (BoJ) decision to maintain its ultra-acco

Arslan Butt•Friday, April 28, 2023•1 min read
The USD/JPY pair quickly rose above 134.750 in the Asian session following the Bank of Japan’s (BoJ) decision to maintain its ultra-accommodative monetary policy. BoJ Governor Kazuo Ueda, in his first monetary policy meeting, announced the continuation of expansionary monetary policy and kept the Japanese Government Bonds (JGBs) band unchanged.

The decision to keep rates in negative territory was widely anticipated, as the central bank is struggling to maintain inflation consistently above 2%. With the effects of higher import prices subsiding, Japan’s inflationary pressures are struggling to gain traction.

Earlier, Nikkei reported that during the review, the BOJ will aim to clarify the effectiveness and side effects of its monetary easing measures and apply the findings to future policy actions. As a result, further action from the BoJ is expected. The likelihood of an exit from ultra-accommodative monetary policy has diminished as BoJ Ueda stated, “Will take additional easing steps without hesitation as needed while striving for market stability.”


USD/JPY Technical Outlook

The USD/JPY pair retreated from the 137.00 level yesterday as negative stochastic indicators pushed it lower. However, new positive signals are emerging, which should help propel the price back into the bullish wave’s bullish channel, with our next target at 137.70.

If prices remain above 135.40, the indicated bullish wave will continue to receive support from the EMA50; however, breaking above that level would invalidate the bullish scenario and lead prices to test the 133.30 area initially.

Today’s trading is likely to occur within a range of 135.60 at support and 137.30 at resistance.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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