The Yen soared yesterday as the US Dollar started to lose its reign after the Federal Reserve opened doors to rate cuts in the second half of this year. The 10-year US Treasury yield fell below 2% to hit the lowest level since November 2016. Domestically, the Japanese Central Bank retained the short-term interest rate target at -0.1%, reiterating that it intends to keep the current low-interest rate environment at least through spring 2020. All-in-all, the monetary policy statement and the rate decision offered no hawkish or dovish surprise, as expected, leaving the pair at the mercy of the US Federal Reserve. With the current bearish market sentiment, the Dollar/Yen is likely to print new lows.
The Dollar/Yen dropped to new yearly lows by breaking below 107.85 and found support at 107.50, another key level. The bears will stay in complete control as long as price remains below 107.85. If 107.50 breaks, then their next target would likely be 107. The bulls, on the other hand, need to hold 107.50 and push price above 108 to stay in the fight.
Support: 107.50 / 107
Resistance: 107.85 / 108.2