USD/JPY short-term technicals turn neutral - Scotiabank

Eric Theoret, Strategist at Scotiabank, noted that USD/JPY is back at square one after BoJ rumors, with neutral signals from short-term technicals.

Key Quotes

“JPY is flat, unchanged from Tuesday’s close following an impressive retracement of its early Asian session decline driven by headlines relating to BoJ policy. Rumors continue to highlight discord among the board, with some policymakers said to still favor an acceleration in the pace of JGB purchases despite Gov. Kuroda’s preference for a push deeper into negative interest rate territory. Kuroda appears to favor a curve management strategy in order to help manage risks to the banking sector. The most recent BoJ rumors have local media sources hinting to a 10bpt cut to –20bpts.”

“USDJPY short-term technicals: neutral—momentum signals are neutral and USD/JPY remains bound within a relatively tight range around the 50 day MA (102.69). The rally above 103 has proved short-lived.”