FxWirePro: USD/JPY downside pressure builds, key support level in focus

 • USD/JPY fell on Thursday as the yen strengthened on BOJ policy shift speculation and tighter JGB-US Treasury yield spreads.

•  The BOJ next meets for a rate review in September before holding another one in October, when the board conducts a quarterly review of its growth and inflation forecasts.

•The BOJ last year exited a decade-long, massive stimulus programme and raised short-term interest rates to 0.5% in January on the view Japan was close to durably hitting its 2% inflation target.

•At its policy meeting in July, the BOJ kept rates steady but revised up its inflation forecasts and offered a less gloomy outlook on the economy, keeping alive market expectations for a rate hike this year.

• Immediate resistance is located at 147.46(50%fib), any close above will push the pair towards 147.45(SMA 20).

•  Support is seen at 145.95(61.8%fib) and break below could take the pair towards  145.22(Lower BB).

Recommendation: Good to sell around 146.40, with stop loss of 147.40 and target price of 145.80