Saturday, April 21, 2018
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USD/JPY erodes 70-pips rapidly to test 112.50 as BoJ’s trims JGBs
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  • Yen gains as BoJ cuts JGBs buying.
  • USD selling also weighs.
  • US JOLTS data on tap.

The USD/JPY pair failed to sustain its recovery-mode above the 113 handle and came under massive supply after the headlines hit the wires that the Bank of Japan (BoJ) trimmed its bond purchases today.

USD/JPY headed to 113.50

The Yen regained lost ground and rallied hard to test four-day lows of 112.46 against its American rival, as the USD/JPY ran into stiff resistances near 113.20 levels following the report that the BoJ reduced its daily JGBs purchases to JPY 190 bln of 10 – 25 Year JGBs compared to 200bn yen last.

Moreover, the resumption of the sell-off in the US dollar against its major peers over the last hours also added to the aggressive selling seen in the USD/JPYpair. Meanwhile, the spot failed to find some support from higher Japanese stocks, which reflected a better sentiment towards risk assets.

In the day ahead, amid a lack of significant macro drivers, the sentimentaround the greenback and global stocks will play a key role ahead of the US JOLTS job openings data release among other minority reports.

USD/JPY Technical View

Jim Langlands at Charts, explains, “113.30/40 should continue to see decent sellers although a break would allow 113.75/80 and possible 114.00. Above 114.20 would then see a break of the descending trend resistance which could see an acceleration higher. On the downside, support will be seen at there are buyers at 112.70 while stronger support lies in the 112/112.30 area.”

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