Yen traders are braced for more volatility in the currency today as the Bank of Japan delivers its latest rate decision. The market fully expects rates to remain unchanged, but a significant portion anticipates that the central bank will advise pulling back on its bond purchases moving forward. This should see the Yen appreciate; however, as this expectation has been discussed in the market for the last couple of weeks, any failure to deliver could bring further downside for the currency.
USD/JPY is currently sitting just below key trendline resistance on both the hourly and daily charts, as well as a raft of recent highs near the 157.50 level. A clean break here after the meeting could see the pair move into fresh topside ranges, which is unlikely to be popular with the central bank and Ministry of Finance. Initial support on the downside comes in around 156.40 at the 200-day moving average, with strong support down on the trendline near 154.80.
Resistance 2: 160.03 – April High
Resistance 1: 157.50 – Multiple highs June
Support 1: 156.40 – 200-day Moving Average
Support 2: 154.80 – Trendline Support
