USD/JPY stays at monthly lows ahead of FOMC verdict

USD/JPY extended losses during the New York session to fresh 1-month lows as investors seemed disappointed by BoJ measures and await the Fed verdict.

USD/JPY moved to a daily high of 102.77 as the knee-jerk reaction to BoJ call, but the yen managed to completely retrace losses and dragged USD/JPY to a low of 100.53 in recent dealings. The pair was last trading at 100.74, recording a 0.92% loss on the day.

However, with the FOMC decision still on tap, next will ensure volatility and there is still room for USD/JPY to widen its daily range.

On Wednesday, the Bank of Japan introduced ‘QQE with Yield Curve Control’, a new policy framework that will seek to control both short-term and long-term interest rates. The BoJ also left the policy rate unchanged at -0.10% but said it will not hesitate to ease further.

USD/JPY technical levels

In terms of technical levels, next supports are seen at 100.05/00 (Aug 26 low/psychological level), 99.53 (Aug 16 low) and 98.98 (Jun 24 low). On the other hand, short-term resistances line up at 102.05 (10-day SMA), 102.57 (50-day SMA) and 103.35 (Sep 14 high).