USD/JPY down more than 0.80%
USD/JPY fell sharply on Thursday more than 0.80%, as forex investors continued to digest the FOMC’s latest policy announcement and as they brace for the Bank of Japan’s monetary policy decision tomorrow. The Japanese yen was largely supported on Thursday, as risk appetite faded and investors sought ‘safer’ bets. However, it was Bernanke’s dovish stance which weighed on the dollar as US yields fell sharply and interest rate differentials compared to Japan’s eased.
The pair fell to 80.67 on Thursday, from a high of 81.42. It has repeatedly failed to break above the 38.2% fibonacci retracement level of the March/ April sell-off by 81.78 and it dropped sharply after failing to close above its 50-day moving average by 81.38. Forex investors are now awaiting the BOJ’s policy decision scheduled for tomorrow. Another round of quantitative easing may lead to a reversal out of this short-term bearish trend and give scope for a move higher to 82.00. A disappointing outcome by the BOJ may drive the pair lower. To the downside, support is represented by April low of 80.30 and its 20-week moving average by 79.64.
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