The USD has struggled to better the Asian highs of 119.75 and is now trading roughly in the middle of its 119.30-119.75 range. Price action is now stuck at levels close to the opening point as the market loses direction and ideas. The BOJ left policy unchanged with its overnight target rate set at 0.5% as expected but a larger than expected fall in consumer prices and industrial production caught the near-term market hawks wrong footed.
Some order was returned by a set of fairly hawkish remarks from BOJ governor, Fukui. The BOJ would need to hike rates as long as long-term economic and price trends are strong, he said. USD/JPY still has a 120.00 look about it but the market needs to get today's U.S GDP data out of the way before fresh direction is seen. There is a feeling in the market that unless the recent 119.85-88 highs are bettered today the risk is for a Yen fight back next week. The 120.00 option barriers look safe.
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