The USD/JPY pair eroded nearly 25-pips in a knee-jerk reaction to the BOJ policy decision, and tested 111 handle, before rebounding sharply to refresh daily tops at 111.27.

USD/JPY still below 50-DMA

The major has now entered a phase of upsides consolidation in early Europe, as the bulls await the BOJ Governor Kuroda’s presser for next push higher. Meanwhile, the sentiment on the European open is also awaited for fresh impetus amid a lack of fundamental drivers until the NY session.

Over the last hours, the spot remains well bid amid renewed USD buying and higher US yields, while markets have ignored status-quo maintained by the BOJ, as it continues to see policy consistent in achieving its 2% inflation goal.

USD/JPY Technical levels                 

Karen Jones, Analyst at Commerzbank offers technical levels for the spot: “USD/JPY near term has eroded the 6 week downtrend and is now positive: USD/JPY has eroded the near term downtrend and the 200 day ma. The move above here should clear the way to the 112.13 24th May high. Rallies will need to regain 112.13 to retarget the 114.38 recent high.”