USD/JPY: No response to the status quo BOJ
The USD/JPY is seeing little action after the status quo BOJ decision.
The Japanese central bank voted 8 to 1 to leave unchanged its pledge to increase the monetary base at an annualized pace of JPY 80 trillion.
Further, it voted 7 to 2 to keep interest rates unchanged and also made no changes to forward guidance, adopted in July that pledges to keep interest rates extremely low for an extended period.
However, its quarterly report said that risks to price outlook are skewed to the downside and the effects of sales tax hike pose risks to the BOJ's baseline scenario. It also cited protectionism as a risk to the economic outlook.
So, it seems safe to say that the BOJ is unlikely to move the needle on interest rates or QE program any time soon. Hence, for the USD/JPY, the path of least resistance is on the higher side.
Technically speaking, the pair is looking north, having closed above 112.89 yesterday. At press time, the currency pair is trading at 113.20, having clocked a three-week high of 113.33 earlier today.