USD/JPY looks set to test the 130.00 resistance level – OCBC

USD/JPY touched its highest level in nearly two decades above 129.00 before losing its traction and retreating toward the mid-128.00s. Bias is for a test of the 130.00 resistance, although a profit-taking retracement is also in order after the rapid ascent, economists at OCBC Bank report.

BoJ will conduct an unlimited fixed-rate purchase operation for Japanese Government Bonds

“The Bank of Japan (BoJ) continues with its unlimited bond-buying in line with YCC targets. This reemphasizes the Fed-BoJ divergence and leaves any jawboning by Kuroda and FM Suzuki ringing hollow.”

“The language is stepped up compared to last week, but so long as there is no threat of direct intervention, the market will likely not give it much regard at this stage.”

“Going forward, stay positive, and do not rule out a firmer test of 130.00. However, perhaps we should not be too quick in expecting a breach of that resistance. A profit-taking retracement may be in order.”