Bank of Japan held the policy balance rate at -0.100%. They left the 10-year JGB yield target at around 0%. The meeting matched expectations that the BoJ would not alter its stimulus plan, as underlying inflation remains stuck at around zero percent growth. USDJPY was little changed, holding just above 111.00 but rallied to 111.32 during Korudas press conference. The head of the bank emphasized a determination to maintain accommodative policy in the face of low inflation despite an improvement in economic conditions. He remained very reluctant to be drawn on any reduction the 80 bln yen per month stimulus programme.
The strong close in USDJPY yesterday triggered a LONG position which was filled this morning at 111.10, target 1 at 111.80 is the latest Fractal high and target 2, the top of the Bollinger band at 112.40. The RSI is 53 and rising and the parabolic SAR also turned positive, following the breach and break of the 20 and 200 day moving averages. Support is the 110.70 zone but a break of the 110.00 area would negate this move.
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