April 25, OctaFX – The Japanese yen gained against the USD after the Bank of Japan (BOJ) delivered its interest rates decision. The bank left interest rates unchanged at minus 0.1% as expected. It will also continue to purchase more Japanese Government Bonds (JGB) so that the yield on the 10-year notes remain around zero percent.
The bank also guided that the current interest rates will be maintained until at least ‘spring 2020’. The bank is facing the challenge of slow growth and extremely low inflation rates. In fact, recent data revealed that the country’s exports had the fourth straight month of decline while consumer sentiment declined to the lowest level in three years.
USDJPY technical analysis
The USDJPY pair declined sharply before and after the BOJ delivered its interest rates decision. The pair declined from a high of 112.40 to an intraday low of 111.83. On the hourly chart, the pair is trading along the middle line of the Bollinger Bands. The Bears Power has weakened slightly while the RSI is trading at the 50s level. Today, the pair could decline to test the important support level of 111.75.
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