USD/JPY: the downside after minister’s Aso speech

The Japanese MOF Taro Aso during his speech on the monetary stimulus in Tokyo said:

“The government will leave the definition of the monetary policy to the BOJ, hoping that it will reach the price target soon”

“The quantity of the economic package is still to be defined”

In line with this scenario, moreover, the Japanese government is considering the possibility to increase the expenses of 6tln, only 2 of which will be considered additional budget (against market expectations which were oriented to an increase from 20 to 30tln Yen).

On the forex side, after having touched the 105 level, the USD/JPY was on the ground to touch new lows to 104,60 before recovering some points after the bearish growth expectations by the government.

The downside pressure on the pair, even more, has accelerated during the Asian session closing, pushing down the price to the 8-days low, to 104. The recent Yen strength derives from the persistent uncertainty by the government on the quantity of the economic package, and it suggest to the market that the government shouldn’t be ready to sustain market expectations.

In addition, the Nikkei 225 losses are increasing the downside move of the USD/JPY cross.

Usd/Jpy 26Lug

With the pair trading at 104,29 at the moment with a negative performance of 1,40%, we can see important levels on the chart.

Technical Analysis suggest us that the first resistance could be find at 105,83 (10-DMA), broken which the pair should go to the second one at 106 (round number). On the opposite side, the first support level is seen at 104,16 (20-DMA) followed by the 103,89 one.

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