USD/JPY: Yen hits 2-week highs, despite BOJ easing further – ETF buying

The USD/JPY  pair extends its volatile trading, displaying more than 250-pips movement in a knee-jerk reaction to the BOJ’s further easing stance at its policy meeting held today.

USD/JPY: Yen extends gains

The Japanese currency quickly reversed a knee-jerk upward spike to 105.65 levels and plummeted almost 300-pips below 103 handle against its US counterpart, shrugging-off BOJ’s latest policy decision to ease further by increasing ETF purchases, so balance of its holdings rises at annual pace of 6 trln yen vs previous 3.3 trln yen.

Meanwhile, the BOJ kept the interest rates unchanged at -0.1%, and made no changes to asset purchase program and base money target. Markets now digest the BOJ’s latest move and look forward to BOJ Chief Kuroda’s press conference for fresh insights on the easing measures. At the time of writing, USD/JPY trades just ahead of 103 handle, down -2% on the day.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 104.86 (5-DMA). A break above the last, the major could test 105.54 (10-DMA). While to the downside, the immediate support is seen at 102 (round number) and below that at 101.43 (Jul 5 low).