USD/JPY Price Analysis: Storm continues above 131.00 amid unchanged BOJ interest rate policy

• USD/JPY is struggling to extend its storm further above the prior auction area in a 131.38-132.93 range.
• The asset has conquered the 200-EMA swiftly post unchanged monetary policy by the BoJ.
• The US Dollar Index (DXY) has surpassed 102.40 after delivering a breakout above 102.20 resistance.

The USD/JPY pair is continuously driving vertically, showing no mercy to intermediate resistances amid weakness in the Japanese Yen after the announcement of the unchanged monetary policy by the Bank of Japan (BoJ). The major has recorded an intraday high of 131.50 as BoJ Governor Haruhiko Kuroda has kept the interest rate steady at -0.10% and the 10-year Japanese Government Bonds (JGBs) around 0%.

An unchanged monetary policy has created ambiguity among the market participants. Investors were also expecting that the BoJ might dismantle the extended target of yield curve control as it demand massive bond-buying for defending the cap, as reported by Reuters.

The US Dollar Index (DXY) has scaled sharply above 102.40 after delivering a breakout of the crucial resistance at around 102.20. S&P500 futures have turned positive after a subdued performance in early Asia, portraying sheer volatility in the market.

USD/JPY is struggling to extend its storm after reaching the previous auction area placed in a range of 131.38-132.93 on an hourly scale. The asset has conquered the 200-period Exponential Moving Average (EMA) at 130.13 comfortably, which indicates that the long-term trend is super-bullish now.

A range shift into the bullish territory of 60.00-80.00 by the RSI (14) is indicating that the upside momentum is active.

For further upside, the asset needs to settle above the aforementioned auction area in a 131.38-132.93 range, which will drive the asset towards January 6 high at 134.77 followed by December 19 low around 136.00.

On the flip side, a decisive drop below Monday’s low at 127.22, will expose the asset for more downside towards the horizontal support plotted from May 24 low at 126.36. A slippage below the latter will open room for further downside toward the psychological support at 125.00.

USD/JPY hourly chart