USDJPY pulls back from 200 SMA

USDJPY retracted from major resistance at 137.50 which coincides with 200 SMA (red line) despite the fact that BoJ Gov. Kuroda brushed aside chance of a pivot stating that “the BoJ is seeking to sustainably and stably achieve its 2% inflation target accompanied by wage growth. Our view is that this will likely take more time.” However, analysts with close ties to policymakers suggested that the BOJ may abandon its 10-year bond yield cap as early as next year on growing prospects that inflation and wages overshoot expectations, as reported by Reuters. Meanwhile, greenback weakness on Tuesday despite recent US data pointed to a resilient economy and bolstered the case for further monetary tightening.

The US dollar strengthened yesterday after upbeat US ISM data, however today upward momentum lost its steam. Source: xStation5

USDJPY - as long as the pair sits below 200 SMA (red line) downward move may depend towards major support at 133.00 which is marked with 38.2% Fibonacci retracement of the upward wave launched in January 2021. On the other hand, if buyers manage to regain control and break above the aforementioned resistance, an upward move may accelerate towards local resistance at 140.35. Source: xStation5