The Japanese Yen weakens after the BoJ decided to leave its ultra-lose policy settings unchanged.

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• The Japanese Yen weakens after the BoJ decided to leave its ultra-lose policy settings unchanged.
• The upbeat market mood further undermines the safe-haven JPY and pushes USD/JPY higher.
• The divergent BoJ-Fed policy expectations support prospects for a further move up for the pair.

The Japanese Yen (JPY) comes under some selling pressure after the Bank of Japan (BoJ) announced its decision on Tuesday, lifting the USD/JPY pair to the 148.55 area, or back closer to a multi-week top touched last Friday. As was widely expected, the Japanese central bank maintained the status quo, leaving its Yield Curve Control (YCC) and negative interest rate policy at the end of the January meeting. Adding to this, there was no changes to forward guidance on monetary policy, which, along with a positive risk tone, undermines the safe-haven JPY.

Traders, however, seem reluctant to place aggressive bets around the USD/JPY pair and look to BoJ Governor Kazuo Ueda’s comments at the post-meeting press conference for cues about the interest rate outlook. This, in turn, will play a key role in influencing the JPY price dynamics in the near term. In the meantime, expectations that the Federal Reserve (Fed) might wait until May before cutting interest rates in the wake of a still-resilient economy continue to act as a tailwind for the US Dollar (USD) and lend support to the currency pair.

From a technical perspective, the range-bound price action witnessed over the past four days comes on the back of the recent breakout through the 100-day Simple Moving Average (SMA) and might still be categorized as a bullish consolidation phase. Moreover, oscillators on the daily chart are holding comfortably in the positive territory, suggesting that the path of least resistance for the USD/JPY pair is to the upside. That said, bulls might still wait for a move beyond a multi-week top, around the 148.80 region touched last week before placing fresh bets. Spot prices might then aim to surpass an intermediate hurdle near the 149.30-149.35 zone and reclaim the 150.00 psychological mark for the first time since November 17.

On the flip side, the 100-day SMA resistance breakpoint, currently around the 147.55 region, offered some support to the USD/JPY pair on Monday and might continue to protect the immediate downside. That said, a convincing break below the said area might prompt some technical selling and drag spot prices to the 147.00 round figure en route to the next relevant support near the 146.60-146.55 area. Any subsequent fall, however, might still be seen as a buying opportunity and is more likely to remain limited near the 146.10-146.00 horizontal support.

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