USD/JPY touches 125.01 levels overnight; market awaits BOJ’s monetary policy

The Bank of Japan is expected to keep its money-printing program intact on Friday when it delivers its Monetary Policy Statement, even as the bank's inflation target remains a distant dream, and as the economy sits on the verge of contraction.

However, the majority of economists expect that the Bank of Japan (BoJ) will soon be forced to expand its Qualitative and Quantitative Easing (QQE) program as inflation fails to approach the bank's target.

QQE was initiated in April 2013 with the aim of helping to generate economic growth by fast-tracking inflation to the BoJ's 2% target rate within two years.

More than two years on and inflation in Japan is still hard to come by. The latest inflation data show the national core CPI rising just 0.1% year-on-year in June, and Tokyo's inflation measure sliding 0.1% year-on-year in July.

GDP growth data for the June quarter, due later this month, is expected to show that the economy contracted by around 1-2%.

Pair is currently supported above 124.50 levels and made intraday high at 124.88. Touched low at 124.70 levels. Entry level is absent at this point of time, waiting for the clear cut opportunity in the upcoming hours.