Forex: USD/JPY higher around 93.50

FXstreet.com (Barcelona) - The USD/JPY is more biased to the upside today as the BoJ meeting puts investors on their toes ahead of an expected new dovish approach by Governor Kuroda. The recent trend, however, has been towards the downside since March 12 and hitting a low at 92.57 yesterday. The pair rose to 93.69 high today and has been stabilizing around 93.50 area.

There is a report by Nikkei newspaper saying that the BoJ is likely to boost asset purchases by about JPY1.2 trn per month. “That would not in our view qualify as the "regime change" spoken of by Deputy Governor Iwata during his parliamentary confirmation hearings. In fact, additional easing on such a modest scale would only correspond to an annual increase of about JPY15 trn”, wrote UBS analyst Gareth Berry, adding that even if the policy decision itself disappoints we would consider any subsequent USDJPY dip to be a buying opportunity ahead of the next meeting on April 26-27 when semi-annual forecasts are due for revision. “A fresh USD/JPY positive reared its head overnight too, and ultimately led to a brief round of broad-based dollar strength”, he concluded.

“We note the technical signals are negative, which leaves supports exposed. Minor resistance comes in at the 95.34 near term resistance line ahead of 96.14 and the 96.71 March high. Longer term we target 99.70 (50% retracement of the 2007 to 2011 drop) and then 101.27/67 (the 1999 and 2005 lows)”, wrote Commerzbank analyst Karen Jones.