USD/JPY catches fresh bids, eyes 109.50 ahead of BoJ’s Kuroda

• Yen sellers return as markets digest BoJ’s price goal tweak.
• Looks to regain 109.50 ahead of US Q1 GDP figures, as focus shifts to FOMC.

The USD/JPY pair is seen making another attempt to regain the 109.50 barrier, having consolidated briefly around 109.20 following the Bank of Japan’s (BoJ) monetary policy decision.

The spot is catching a fresh bid-wave, as markets resort to fresh Yen selling across the board, in a delayed reaction to the BoJ’s removal of the phrase on the timeframe for achieving the price target from its quarterly outlook report. This implies that the Japanese central bank is not confident that it can achieve its 2 percent inflation goal by FY 2019 as previously mentioned.

Meanwhile, the US dollar extends its consolidative near multi-month tops against its main peers, in response to a wait-and-see stance ahead of the US GDP numbers. Thus, having little impact on the USD/JPY’s renewed upside while the Nikkei 225 index extended gains and finished +0.71% on the day.

All eyes now remain on the BoJ Governor Kuroda’s press conference for fresh momentum on the prices.

USD/JPY levels to watch

Omkar Godbole, Analyst at FXStreet notes: “A rally to 110.04 (61.8 percent Fibonacci retracement of Jan-Mar sell-off) cannot be ruled out, albeit after a minor pullback as suggested by the developments in the 4-hour chart. The bearish RSI divergence indicates scope for a minor pullback to 108.89 (100-day MA). A violation there would expose support at 108.28 (Jan. 26 low). However, the dips will likely be short-lived as suggested by the bullish setup in the daily chart. Only a daily close below 108.28 would abort the bullish view.“