- Yen came under pressure after the minutes of the Bank of Japan's (BOJ) latest policy meeting showed increasing support for more monetary easing.
- Meanwhile, Kuroda stressed the need to keep the policy accommodative and said the exit from QQE will happen only after the 2 percent inflation target is achieved.
- USD/JPY hit 8-month highs at 114.73 before paring some gains to currently hover around 114.36 levels.
- 10Y US-Japan bond yield differential which remains largely muted is keeping lid on further upside in the pair.
- The difference or the spread between the 10-year US bond yield and Japanese bond yield remains largely muted.
- Technical studies support upside. 'Golden Cross' formation on daily charts adds upside bias.
- Channel top at 114.40 is strong resistance, breakout above will see further upside.
Support levels - 114.05 (5-DMA), 113.22 (20-DMA), 112.76 (23.6% Fib retrace of 107.31 to 114.45 rally)
Resistance levels - 114.40 (trendline), 114.45 (Oct 27 high), 115, 115.50 (March 10 high)
Recommendation: Go long on breakout above 114.40, SL: 114, TP: 114.85/ 115/ 115.50.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 40.8873 (Neutral), while Hourly JPY Spot Index was at 19.8817 (Neutral) at 0340 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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