JPY: Important psychological support seen at 105 - BBH

Analysts at BBH point out that the dollar was moving lower against the Japanese yen since running out of steam near JPY107.70 on February 27 and the high from the previous week was around JPY107.90.

Key Quotes

“What appeared to push the dollar below the JPY105.55 low from February 16 was comments from BOJ Governor Kuroda.  He suggested that the policy framework would be re-examined in April 2019 and that policy can normalize before the inflation is hit.”

“The market took this as a fresh hawkish sign, though we suspect next week's BOJ meeting and press conference will correct this impression.  The dollar fell to JPY105.25.  Important psychological support is seen at JPY105.  The technical indicators mixed, but do not seem to prevent additional losses.  If there is a double top near JPY108, and the neckline near JPY106 has been convincingly broken, the measuring objective is near JPY104.  BOJ Governor Kuroda could use next week's press conference to better clarify the meaning of his recent comments that spurred speculation of the end of the extraordinary monetary policies before the 2% inflation target is reached.”