USD/JPY Price Analysis: BOJ’s Dovishness Puts Yen in Hot Waters

• The Bank of Japan left interest rates at historic low levels.

• The US Federal Reserve held interest rates steady after ten hikes.

• The United States industrial sector faltered in May due to increasing interest rates.

Today’s USD/JPY price analysis is bullish. The Bank of Japan left interest rates at historic low levels and predicted that inflation would moderate later this year, causing the yen to decline on Friday. The BOJ kept its 0% cap on the yield on 10-year bonds and its target short-term interest rate of -0.1%, as predicted.

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The financial market responded with higher stock prices and a weaker yen, Hirofumi Suzuki, chief FX strategist at SMBC, said. “While the decision was not a major surprise, a few participants… had expected a YCC adjustment.”

Elsewhere, after ten consecutive rate increases, the US Federal Reserve held interest rates steady. However, the Fed also hinted that borrowing costs may still need to climb by as much as 0.5 percentage points by the end of this year. Still, a slew of data left investors questioning that assumption as US economic activity slowed and inflation decreased.

The United States industrial sector faltered in May due to increasing interest rates, and import prices decreased last month. 

Furthermore, initial claims for state unemployment benefits were constant at a seasonally adjusted 262,000 for the week ended June 10. This was higher than economists’ expectations of 249,000.

However, as more people increased their purchases of cars and building supplies, retail sales in the United States unexpectedly increased in May.

USD/JPY key events today

After the BOJ rate decision, investors are not expecting more significant economic releases from Japan or the US. Therefore, they will keep digesting recent developments on interest rates in the US and Japan.

USD/JPY technical price analysis: Bulls comeback eying 141.50

The bias for USD/JPY is bullish because the price trades above the 30-SMA and has made a higher low at the SMA support. After a strong bullish move, the price paused at the 141.50 resistance before retesting the 140.25 support and the 30-SMA. 

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Bulls returned at the 140.25 support with a strong candle to continue the uptrend. This will likely see the price rise to retest the 141.50 resistance. A break above this resistance would make a new high and confirm the continuation of the bullish trend.

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The Bank of Japan left interest rates at historic low levels. The US Federal Reserve held interest rates steady after ten hikes. The United States industrial sector faltered in May due to increasing interest rates. Today’s USD/JPY price analysis is bullish. The Bank of Japan left interest rates at historic low levels and predicted that inflation would moderate later this year, causing the yen to decline on Friday. The BOJ kept its 0% cap on the yield on 10-year bonds and its target short-term interest rate of -0.1%, as predicted. –Are you interested to learn more about day trading brokers?…