As per the BOJ Outlook of economic activity and prices in July 2020, Japan’s economy is likely to improve gradually from the second half of this year with economic activity resuming, but the pace is expected to be moderate as the impact of the novel corona virus (COVID-19) remains worldwide. Thereafter, as the impact subsides globally, the economy is projected to keep improving further with overseas economies returning to a steady growth path.

The outlook for economic activity and prices provided in this Outlook Report is extremely unclear, since it could change depending on the consequences of COVID-19 and the magnitude of their impact on domestic and overseas economies. With regard to the risk balance, risks to both economic activity and prices are skewed to the downside, mainly due to the impact of COVID-19.

Further comments are coming in from the Bank of Japan (BOJ) Governor Haruhiko Kuroda, in his scheduled press conference after the monetary policy decision announced.

The speech of Mr. Kuroda “Will strive to support financial market stability, corporate financing for time being.” “Various measures are available for further easing including interest rate cuts.” “Hong Kong is a very important market for financial markets.” “Number of corporate bankruptcies is very low now.” “The second wave of corona virus infections is not occurring in advanced economies apart from the US.” “Consumption of goods and output has hit bottom.” “Japan’s CAPEX remains firm.” has added some positive sentiment in the market.

Further comments came from the Bank of Japan (BOJ) Governor Haruhiko Kuroda, in his scheduled press conference after the monetary policy decision announced on Wednesday.

USD/JPY 4 Hour chart:

Support: 107.09 (S1), 106.95 (S2), 106.89 (S3).

Resistance: 107.40 (R1), 107.57 (R2), 107.71 (R3).

Even though BOJ’s Outlook of economic activity and prices July 2020 is not supportive to yen but optimistic speech of BOJ Kuroda supports yen. We expect bearish trend for USDJPY.