Dollar-yen closed in NY Tuesday at Y93.43 after rate had extended its recovery off earlier Asian lows of Y92.57 to Y93.56. Rate drifted off to Y93.32 before turning higher, the move up acting on a strong Nikkei which took it on to a high of Y93.69. Euro-yen moved up in tandem but met stiff resistance on approach to Y120.00, with macro and momentum funds the stand out sellers. The two day BOJ meeting began today with Thursday’s announcement providing anticipation for strong action based on new BOJ Kuroda’s determination to do ‘whatever is necessary’ to eradicate deflation, committing to reach 2.0% inflation within 2-years. Until the announcement market expecting yen to consolidate, taking next direction from the planned initiatives. Traders have suggested that with this high anticipation the market could be leaving itself open to disappointment but would look to buy any dips in yen pairs on the expectation that the BOJ will be determined to take action over the next few months.
EasyForexNews Research Team