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"The BOJ's inaction disappointed the market a little bit. There's some unwinding of yen selling"
- Bank of Tokyo- Mitsubishi UFJ Ltd. (based on Bloomberg)
Pair's Outlook
The upper limit of a bearish channel has rejected USD/JPY, forcing it to decline. The initial support the pair is supposed to confront is at 78.14/77.99, although bears may drag the price down to 77.49/26 or even 76.99 before bulls once again take control and start another up leg. In the long run we continue to expect the pair to surge above 79.65/80 and challenge higher resistances.
Traders' Sentiment
The Japanese Yen is still the least frequently acquired currency among its major counterparts (in 30% of cases). Accordingly, positioning of traders on USD/JPY is strongly bullish—71% of positions are long and 29% are short and thus supporting long-term outlook.
© Dukascopy Bank SA