USD/JPY (current price: 108.91)
The pair has been volatile since breaking below the crucial 110 level as technical selling added to the strong safe haven flows that have been supporting the Yen compared to the Dollar. USD/JPY is up today in early trading after hitting a low of 107.65 on Thursday. Mr. Kuroda’s speech couldn’t reverse the trend yesterday, even though he pledged to use additional measures to reach the targets of the central bank. The BOJ has been using aggressive Quantitative Easing and negative interest rates to ease monetary conditions but the Yen is up by more than 10% against the majors in the past 6-months, hurting the prospects for the local economy.
Our assessment: The pair is likely to re-test yesterday’s lows after getting back to the long-term declining trend channel with the steep decline. Volatile trading is expected to continue today.
