The dollar gave up gains against the Japanese yen on Tuesday after the Bank of Japan held off implementing fresh monetary easing measures, but sounded a more pessimistic tone on the outlook for the economy. The Bank ofJa left monetary policy unchanged at the conclusion of its two day policy meeting on Tuesday, but acknowledged that a pullback in consumption is leading to weakness in production.
“Japan’s economy has continued to recover moderately as a trend,” the BoJ statement said, but it noted “some weakness, particularly on the production side” as domestic demand slumped after a sales tax hike in April.
Intraday bias remains on the downside as 21 and 55 EMA trend indicators are crossed downward in the 1 hour charts and 4 hours charts signalling a retracement of the bullish trend in the Daily charts. SSRC, Stochastic, RSI and MACD oscillator indicators are showing bearish momentum is still intact, so am expecting further decline to 107.184 supports (Weekly Support 2) in the medium term picture. A clear break of 107.996 support would increase the odds of a further decline.
Tomorrow investors would be focusing on the U.S FOMC Meeting Minutes which would provide much volatility in the market as speculation of a rate hike is coming sooner in the US economy and also a tendency the current bond buying program would come to an end sooner.