The USD/JPY has risen nearly 100 pips in one swoop after the Bank of Japan said it was keeping interest rates unchanged at -0.1%, as expected. The pair has jumped to new highs since August 1998 at 145.38, but has since dropped nearly 190 pips, crashing to 143.51, its lowest level of the day.
Board members of the Bank of Japan (BOJ) decided on Thursday to make no changes to their monetary policy settings, keeping rates at -0.1% and the 10-year JGB yield target at 0.00%. The announcement comes after the central bank wrapped up its two-day policy review meeting.
The statement highlights that short-term and long-term interest rates are expected to remain at “current or lower” levels, ruling out a hike at the next meeting.
While digesting the announcement, with the pair making high volatility moves, USD/JPY trades at time of writing above 144.73, gaining 0.48% daily. In the event of further gains, the pair would run into a first resistance at the 146.00 zone. Above, the target would be 147.63, August 1998 peak and highest level since 1990.
On the downside, initial support awaits at 143.40, post Fed low on Wednesday 21st September. Further down, the pair could drop towards 142.55, 14th Sep low.
Source: Fx Street
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