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Bank of Japan Maintains an Ultra-soft Monetary Policy

3/13/2023 12:52 PM

Against the negative dynamics of the American currency, the USD/JPY pair is correcting at 134.12, however, poor macroeconomic statistics do not allow the yen to strengthen further.

The Bank of Japan, as expected, maintained its ultra-soft monetary policy, leaving the interest rate at –0.10%. The regulator's management believes that the indicator does not have a serious negative impact on inflation, and over time it will return to normal without additional monetary impact. However, the national business continues to struggle: according to the February report, the corporate goods price index fell by 0.4%, which led to a slowdown in annual growth to 8.2% from 9.5% a month earlier, harming the yen.

After Friday's report on the labor market, the US currency fell to 103.500 in the USD Index, preparing to continue the negative dynamics: thus, nonfarm payrolls fell to 311.0K from 504.0K a month earlier, which led to an increase in unemployment to 3 .6% from 3.4% earlier, contrary to earlier reports, which recorded a decrease in initial jobless claims.

On the daily chart, the trading instrument is moving in a corrective trend.

Technical indicators are weakening the buy signal: fast EMAs on the Alligator indicator are approaching the signal line, narrowing the range of fluctuations, and the AO histogram is forming downward bars above the transition level.

Resistance levels: 135.30, 137.90. | Support levels: 132.70, 129.80.

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