FxWirePro: USD/JPY retraces from session highs after BoJ keeps rates steady, boosts pace of ETF purchases

USD/JPY chart - Trading View 

USD/JPY edges lower after showing mild upticks after BoJ keeps rates steady, boosts pace of ETF purchases.

In the monetary policy statement that followed, the central bank said that Japan's economic activity likely to remain weak for time being due to the effect of the coronavirus outbreak.

It added that the economic activity is expected to eventually return to moderate expanding trend.

Further, U.S. Federal Reserve’s (Fed) unexpected rate cut over the weekend continues to keep the dollar bulls at bay.

The US Federal Reserve (Fed) announced a surprise rate cut to 0.25% while also keeping tabs ope for $700 billion of Quantitative Easing (QE).

USD/JPY dropped lower from session highs at 107.56 and was trading 1.46% lower on the day at 106.38 at around 05:45 GMT.

The major had been on a gradual uptrend since August 2019 before the impact of coronavirus outbreak.

Price hit multi-year lows at 101.18 before showing a sharp recovery. The pair has edged above 200H MA and is showing signs of further recovery. 

Upside remains capped at stiff resistance at 200-DMA (108.24). 'Golden Cross' on the hourly charts can keep cap on downside.

That said, broad market nervousness continues. Despite the Fed’s rate cut and QE announcement, sentiment remains sour amid growing concerns over a global recession.

Rejection at 200-DMA and break below 5-DMA (105.78) will see downside resumption.