No surprises last policy announcement from the Bank of Japan. Governor Kuroda said the central bank will maintain current stimulus plan, repeat all the bullish rhetoric that has been said before appointed / elected in the hot seat back at the end of 2012. However, this non-event successfully dispel some rumors about BOJ potentially lowering the inflation target one year after the start of the current stimulus over concerns that the initial target may be too high and unrealistic. With central bankers from the record to say that the current target and accommodative monetary policy is still on track, speculators and investors interpreted as a sign that the Bank of Japan is ready to implement more stimulus to reach the 2% target by choice or by force, resulting from the renewed confidence that yen weakness will continue.
timetable
However, it should be noted that Kuroda did not promise that BOJ will implement any plan additional stimulus anytime soon. The only thing that was Kuroda said that the central bank will "policy adjustments" as needed, and saying they aim to reach the target of 2% price as soon as possible. In addition, Kuroda said that the downside risks to the Japanese economy is in decline while growth will exceed potential after July this year. Given all this, the governor said that BOJ to continue current policy assuming no other downside risks appear on the road.
This seems reasonable, but it should be noted that it does nothing to address market concerns. It is clear that the market is unstable because they think the so-called economic growth / recovery was not up to par. With Kuroda also remains optimistic as before, it is clear he does not share the same market sentiment. Therefore, it will be strange to say the least that Kuroda has eased market concerns when it does not even recognize that there is a problem. This does not mean that there is indeed a problem, and the market could be proved too paranoid. But the fact is that the market has actually sent USD / JPY after the announcement of the Bank of Japan, although their fears should theoretically remain stationary.
Therefore, it is no surprise to see USD / JPY is pulling lower despite not being able to test high yesterday, or even remain above 104.5 for a considerable period of time. The BOJ announced after rally is unjustified and therefore gains a greater probability of being compared.
From the technical point of view, the price has traded back in last Friday's consolidation area. This suggests that the break happened after BOJ has been invalidated, and the immediate bearish target of 104.2 is possible, and can even go as low as 104.0 should the bearish momentum that started on January 16 remains Thurs stochastic readings agree with the formation of a new high, adding bearish technical pressure.
Table Daily
daily chart shows that the long upward trend in the long term is currently under threat, with prices steadily declining since the peak made January 1 Whereas BOJ did nothing to truly ensure the market today, the probability of a current well-being factor dissipation and USD / JPY trading down more high. From the technical point of view, if broken is 104.0, 103.0 is the next downside target, and should the level mentioned above is broken and we could see a downward acceleration that bullish momentum will be invalidated.
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Read More : USD/JPY – Pullback Seen Post BOJ Rally
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