FXStreet (Mumbai) - The Japanese yen regained lost footing versus its American counterpart in the late-Asian trades, knocking-off USD/JPY back below 121 handle.
USD/JPY drops from above post-FOMC highs
Currently, the USD/JPY pair drops -0.16% to 120.94, sharply retracing from fresh four-day highs recorded at 120.47 in last hours. The USD/JPY recovery lost steam near the mid-point of 121 handle and the prices retreated below the last, as the yen bulls fought back control following the release of the BOJ’s Semi-annual outlook report.
The latest report released downgraded the assessment for Japan’s 2015 and 2016 CPI and GDP forecasts while also noted that downside risks outweigh the upside risks seen in the economy. However, on the positive side, BOJ sees 2% price target to be achieved around second half of FY2016 and also noted that there exists no signs of Japan asset price bubble due to the easy policy approach.
Earlier in Asia, the BOJ left its monetary policy settings unadjusted at its monetary policy decision today with the voting composition maintained at 8-1.
Meanwhile, markets continue to digest the latest forecasts published by the BOJ and eagerly await Governor Kuroda’s take on the economic outlook.
USD/JPY Technical levels to watch
The prices remain capped below 121 barrier, above which the pair could find the immediate hurdle near 121.50 (Today’s High + 200-DMA confluence) and from there to 121.62/73 (100-DMA + Aug 28 High). To the downside, the immediate support in sight is located at 120.23/21 (Oct 28 & 23 Low), below which 120 (round number) would be tested.
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