USDJPY Remains Bullish As Ueda Reaffirms Policy Stance

JPY in FocusThe Japanese Yen continues to weaken across early European trading on Monday. The continued decline of the Yen is once again stoking intervention speculation. With USDJPY now trading well above the 145 level at which the BOJ intervened last year, traders are wary of possible forthcoming action from the bank. However, speaking this morning, BOJ Ueda once again reaffirmed the bank’s commitment to maintaining current policy.Ueda Warns Rate Not Shifting SoonSpeaking on the back of the BOJ holding rates unchanged on Friday, Ueda today reiterated that the Japanese economy is not yet in a place where it will benefit from the removal of monetary easing. Ueda noted that the bank’s target of 2% inflation accompanied by wage gains was not yet in view and said that the BOJ will continue to monitor the situation.  JPY to Remain WeakThe Japanese government recently spoke on the moves seen in JPY, warning that it stood ready to take action, as needed, against any excessive moves. While Ueda didn’t comment on FX markets directly, he did note that excessive moves were unwelcomed and had negative consequences for businesses and consumers alike.  Looking ahead, JPY looks likely to remain weak (particularly against a stronger USD) until signs that a shift in BOJ policy is likely to come.Technical ViewsUSDJPYThe rally in USDJPY sees price action continuing to trade along the upper bull channel limits. With 145 holding below as support, the focus remains on further upside with 151.81 the longer-run target for bulls. To the downside, any shift below 145 will see 142.21 and the bull channel lows come into view as next support. Interestingly, we have a bullish signal in the Signal Centre today set below market 147.75, suggesting interest to buy any dips from current levels.