- USD/JPY slips in the Asian session.
- BoJ's Maeda says Bank is ready to act if further easing is needed.
- US Dollar Index posts modest gains ahead of the U.S. data.
The USD/JPY came under a sudden bearish pressure in the Asian session and lost 30 pips in less than an hour to touch its lowest level in 10 days at 111.65 before retracing its drop. As of writing, the pair was trading virtually unchanged on the day at 111.92.
Earlier today, while speaking before the parliament in Tokyo, the Bank of Japan's Executive Director Maeda reiterated that the bank was ready to act if further monetary easing was needed and if the momentum for hitting the price target was threatened. Additionally, Japanese Finance Minister Aso called the BoJ's fight against the deflation a mistake, putting additional weight on the currency's shoulders by reviving speculations that the bank had run out of stimulus options and could resort to unconventional easing measures.
Moreover, the risk-off flows that were triggered by the U.S. deciding not to renew sanction exemptions for countries exporting oil from Iran and the Iranian parliament approving a bill to label the U.S. army as 'terrorist' helped the JPY find demand as a safe-haven.
Nevertheless, with the greenback gathering strength in the European session, the pair didn't have a difficult time recovering its daily losses. Ahead of the new home sales and Housing Price Index data from the U.S., the DXY is up 0.12% on the day at 97.40, looking to extend its rally to 2019 high of 97.71 that was set in early March.
Technical levels to watch for
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