Japanese Yen Weakens Ahead of BOJ’s Interest Rate Decision, 30+ PIP Volatility Likely; April 26, 2021

Japan BOJ Interest Rate Decision

Bank of Japan will release key interest rate as on April 27, 2021. The release time has not fixed yet. Generally it will release around 0300 GMT/0830 IST. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. In addition, Monetary Policy Statement is among the primary tools the BOJ uses to communicate with investors about monetary policy. It contains the outcome of their decision on asset purchases and commentary about the economic conditions that influenced their decision. Most importantly, it projects the economic outlook and offers clues on the outcome of future votes.

The Covid situation in Japan is worst. The Country has declared another state of emergency due to rising covid cases and death rate. According to the previous BOJ meet, The BOJ also reduced the amount of frequency of its bond and ETF purchases. Currently BOJ owns more than 40% of the government’s bonds. Let’s see what BOJ brings out tomorrow.

Let’s take a look how JPY has reacted during the previous data release:

March 19:

Jan 21:

Technical View:

USD/JPY: The Japanese yen reverses previous gain against U.S. dollar and hovers around 108.00 mark. The pair made intraday high at 108.16 and low at 107.64 mark. The triple EMA on a day chart is bullish while H1 chart confirms bearish trend for the time being. A sustained close above 108.20 on H1 chart requires for the upside rally. Alternatively, a consistent close below 107.51 on H1 will check key supports.

Key Resistances: 108.22, 108.47, 108.90, 109.27, 109.40

Key Supports: 107.65, 107.47, 107.28, 107.00, 106.76

Take a look and do trade wisely!
Good Luck