Opened in early Europe at Y80.88 and Y106.61, USD/JPY opened in Asia at Y81.20 and headed lower on exporter supply through Y81.00 to Y80.90 as volumes remained light into the BOJ policy decision. The rate pressed to Y80.48, before an equally quick spike to Y81.44 on release of extending overall QE by Y10 trn to Y70 trn and increasing the asset buying fund to Y40 trn. Dollar was unable to maintain gains and slipped to Y81.10, rate extended losses to Y80.90 as traders digested the full BOJ statement. The cross mirrored USD/JPY and slipped to Y106.25 on release, before spiking to Y107.48. Rate pared gains and the S&P downgrade of Spain by two notches added weight to print Y106.50 lows. USD continued to grind lower in Europe with sharp sales from Japanese names/hedge funds flushing stops to Y80.49. Profit take demand lifted off lows and continued to settle around Y80.70. The cross tracked dollar lower in early dealings to Y106.16, before meeting strong demand and lifting to Y106.40. A well received Italian auction boosted the pair to settle around Y106.70.
EasyForexNews Research Team