• USD/JPY firmed on Friday as the yen remained under pressure after the Bank of Japan left interest rates unchanged.
• At the two-day policy meeting that ended on Friday, the BOJ kept short-term interest rates steady at 1% in a widely expected move after a hike to the 31-year-high level just last month.
• The Bank of Japan signaled the possibility of further hikes, warning for the first time that underlying inflation could rise above its target.
• The central bank also pointed to rising inflation pressures from strong global AI-related demand and noted that concerns over the economic impact of the Middle East conflict were easing.
• The BOJ’s decision followed Japan’s yen-buying, dollar-selling intervention in New York markets on Thursday, though the move failed to provide a lasting boost to the yen as traders continued to test Tokyo’s commitment to supporting the currency.
• Immediate resistance is located at 160.88 (38.2%fib), any close above will push the pair towards 161.85(Higher BB).
• Support is seen at 159.44(Daily low) and break below could take the pair towards 158.30 (61.8%fib).
Recommendation: Good to buy around 160.40, with stop loss of 159.70 and target price of 162.00
