BOJ Ueda is on the wires saying:
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Optimism over U.S. economic outlook seems to be broadening somewhat
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We need to scrutinize further whether optimism over U.S. outlook is sustained
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BOJ still can afford to spend time scrutinising risks
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Recent yen falls driven partly by optimism over U.S. economic outlook
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When looking at fallout from weak yen on Japan’s inflation, we must look not just at yen moves but factors that are driving them such as market perceptions of U.S. economy
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Markets remain unstable, implied volatility is still quite high
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Policymakers continue to see good chance of soft landing in global economy, though some see divergence among countries
In the past Ueda has characterized on stable markets as market is where the BOJ would refrain from tightening the policy (i.e. tighten to boost the JPY – or lower USDJPY).
Technically, going into the comments, the USDJPY is trading to a new session low at 151.548. In the process, the price also stretched toward its 200-day moving average and 151.387.
Yesterday, the price moved above the 200 day moving average with not much trouble as dollar buying was in full force. The price extended toward the 61.8% retracement at 153.397 but came up short of that target. Today there has been rotation back to the downside
That move now has the price below the swing area at 151.86 and 151.937 (the yellow area and red numbered circles), but coming up short of 200-day moving average at 151.37. The low price has reached 151.548 so far.
A move below the 200-day moving average would open the door for more downside momentum with the 100-day and 50% midpoint of the range since the July high coming in at 150.65 and 150.75 respectively as a next targets.
Conversely, stay above the 200-day moving average and traders will refocus on the swing area above between 151.86 and 151.937. It above that level and the correction looks like a ‘plain vanilla” variety into MA toward MA support.