What’s next? – USDJPY 16.06.17

USDJPY

The USDJPY was 0.03 percent lower as of 13:55 GMT at 110.91, but remained strong due to the recovery of the US dollar triggered by Fed’s interest rate hike on Wednesday.

In Asian hours on Friday, the pair edged up in reaction to the Bank of Japan monetary policy statement, interest rate decision and press conference. As expected, the Nippon regulator left all monetary configurations remained untouched, including interest rates at minus 0.10 percent.

The BOJ is part of a small group of central bank that insist on keeping easy money policies, such as the European Central Bank for instance. These institution insist that financial stimulus is key to promote economic development and that indicators are not strong enough.

The dollar continues to grow against the yen as a higher rates environment in the United States promotes demand of risky assets while dampening interest for safe-havens, such as the yen.

The bullish dollar extension is likely to extend for a bit longer, as the Fed presented a surprisingly hawkish stance, adding that a rate hike is still up in the months to come. Better-than-expected economic reports in the US would support the pair.

From a technical standpoint, the pair is currently looking at a target zone between 111.578 and 112.236 in the short term, while moving into a medium run we see an extension to 113.390.

As of 23:50 GMT on Sunday, we will count on the Japanese adjusted trade balance, as well as the exports for May and trade balance stats.