USD/JPY – Can 105.00 Hold?

USD/JPY – Can 105.00 Hold?

USD/JPY has been tossed and turned by the FOMC decision today and the party isn’t over. Just as the traders finish analyzing Fed’s message they will need to refocus on BOJ which holds their monthly meeting later tonight.

The news from the FOMC presser was mixed. The Fed remains cautious but generally upbeat about the state of the economy leaving open a tiny possibility that it may pull the trigger in July. That helped to keep USD/JPY above the key 105.50 level in post news trade – but just barely.

Tonight the market will want to see if the BOJ will increase its stimulus program (unlikely) and whether it is becoming concerned about the exchange rate (quite possible). The pair therefore may be in for another session of volatility with 105.00 now a key target of the shorts. Any laissez faire attitude from Mr. Kuroda and the pair could quickly fall to those levels as the shorts press for fresh yearly lows.

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