USD/JPY appears to be tired here. It lacks conviction for a decisive move above 109.
The Bank of Japan (BOJ) today was the third major central bank to announce its monetary decision this week, after the Fed and the Bank of England.
The BOJ reiterated its efforts to keep the yield curve control measures in place. Moreover, it promised to keep buying ETFs connected to TOPIX, the major stock exchange in the country.
Lately, rumors had it that the BOJ is willing to let the long-end of yields rise, but the market did not believe such news. As such, the JPY pairs advanced in the last couple of months or so, expecting the BOJ’s statement.
Today, the BOJ reiterated its yield curve control measures, but it also did something that might be considered bullish for the JPY – it widened the yield target band and vowed to buy risky assets only when necessary.
The USD/JPY is at the risk of forming a triple top pattern above 109, and bears may want to stay on the short side. A move and close today below the 108.50 should trigger more weakness.
As such, bears may want to sell a close below 108.50 with a stop at 109.40 and a take profit that respects minimum 1:2 or 1:3 risk-reward ratio.
