As the dust settles from last week’s Bank of Japan stimulus revamp, currency traders have been slowly pushing the yen higher, toward a test of some key technical levels. The USD/JPY cross tested its 50-day moving average, about 110.89, from where it rebound and now is reversing, but the price remains locked below the resistance of about 111.5.
The market should interpret BOJ's actions as a signal that the central bank will not maintain long-lasting low interest rates and is therefore likely to bet on a stronger yen.
Chart: Used with permission of Bloomberg Finance L.P.
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