USD/JPY swings back beyond 111.00 on BoJ’s Kuroda

• Headed back to 111.70 – key resistance?
• BoJ Kuroda sees no change needed to its current policy.
• MonPol divergence to underpin.

The USD/JPY rebound from near 110.50 levels gained traction, following BoJ Governor Kuroda’s dovish remarks, now pushing the rates further northwards in a bid to test yesterday’s high of 111.22. 

The Yen lost footing and gave up the entire gains spurred by the BoJ’s optimistic remarks about inflation expectations while the Japanese central bank left its monetary policy settings unchanged at its meeting held earlier today.

The renewed sell-off in the Yen is mainly triggered by the BoJ Chief Kuroda’s comments, after he said that the BoJ is not in a situation to consider an exit from QQE, adding that the need to maintain powerful monetary easing policy still persists.

BoJ’s Kuroda: BoJ not in a situation to consider exit from QQE

BOJ's Kuroda plays down Yen strength

In the day ahead, markets will continue to digest Kuroda’s speech while broader markets sentiment and USD price-action will play a key role in absence of any significant macro news from the US docket. The USD index rises +0.10% to 90.24, extending the bounce on the back of an end to the US government shutdown.

USD/JPY Technical Levels

A move above 111.22 (Monday’s high) would open doors for 111.41 (38.2% Fib R of Jan. 8 high - Jan. 17 low) and 111.48 (Jan. 18 high). On the other hand, a breach of support at 110.49 (Jan. 19 low) would open downside towards 110.19 (Jan. 17 low) and 110.00 (zero levels).