A drop of 107.60 from 107.72 has resulted after BOJ’s inaction. The Monetary policy was left unchanged in the meeting hours after the emergency price review. Targeted aids for the small and mid-sized firms were extended. Like most central banks, there was no change in the short term interest rate and BOJ pledges to buy as many bonds as needed to keep 10-year government bond yields around 0 percent.

Adding to it, the 13th National People’s Congress (NPC) of China concerning Hongkong also increases the risk in the market. “A further crackdown from Beijing will only intensify the Senate’s interest in reexamining the U.S.-China relationship,” McConnell said in a statement.

Also, it is to be noted that the US 10 year treasury yield is better compared to that of JAPAN’s treasury yield.

We expect a bullish trend for the pair, If there bull continues then it can break at 107.81 (R1) resistance line and aim for the 108.02 (R2) resistance level. If the bears take over, we could see the pair breaking the prementioned upward trendline, the 107.43 (S1) support line and aim for the 107.26 (S2) support level.

USD/JPY 4 Hour Chart:

Support:  107.43 (S1), 107.26 (S2), 106.88 (S3).

Resistance: 107.81 (R1), 108.02 (R2), 108.40 (R3).

Considering all the above catalysts it should be noted that we expect a bullish trend for the pair.