USD/JPY back down to pre-minutes levels after initial rally

FXstreet.com (Barcelona) - The USD/JPY cross rallied initially following the release of the BOJ’s policy meeting minutes but has given all of that rally back over the last two hours.

BOJ minutes offer a mixed bag to go along with Abe’s new initiatives

The minutes from the latest monthly policy meeting of the Bank of Japan provided an initial boost to the USDJPY cross (showing Yen weakness – in reaction to some of the BOJ committee members’ rhetoric). However, the rally faded after just over an hour and selling in the cross re-entered the fray consequently or coincidentally with Prime Minister Shinzo Abe’s ideas making the rounds. Abe is proposing a corporate tax cut to stimulate the economy and counter any ill-effects from the sales tax hike that is soon to be enacted.

Technical outlook for USD/JPY

Technicians say the USD/JPY’s hourly close above 97.21 should open the door to more of a short-term bounce – perhaps up to the 97.90 level or so. There is a very high likelihood of more downside to come in the cross once this bounce has run its course – say those same technicians. Their ultimate downside target is down at 92.50 – 92.60.