USD/JPY recovery falters at 134.40: the pairretreats below 134.00

• The Dollar trims gains after hitting resistance at the 134.40 area.
• From a wider perspective, the near-term trend remains positive.
• The Yen, on the defensive after  BoJ Kuroda discarded any monetary policy change.

The US Dollar has lost ground against the Japanese yen ahead of Wednesday’s European session opening. The pair is trimming gains after a solid market opening as the pair hit resistance at a one-week high of 134.40.

In the near term, however, the greenback remains trading within an upward-trending channel, after having bounced at a 4, 1/2 -month lows at 130.55 last week.

The Yen, on the defensive on BoJ's dovishness

The Yen has traded lower over the last few days, hurt by the comments of Haruhiko Kuroda, Governor of the Bank of Japan, who discarded any chance of the bank ending its ultra-expansive monetary policy.

Kuroda’s comments have triggered disappointment among traders who were speculating about, a certain monetary policy tweak after the surprising announcement that the bank was loosening its control over the long-term bond yields' curve.

On the other hand, the Dollar is trading moderately lower in a thinned post-Christmas week. The US Dollar Index eases about 0.1% on the day, trading around 104.20 at the moment of writing, at a short distance to the six-month low at 103.40 seen two weeks ago.

Market sentiment remains positive on Wednesday, boosted by the announcement that China is planning to scrap restrictions on inbound travelers, which is expected to trigger a strong rebound in the country’s economic growth

On the macroeconomic front, the calendar is practically empty on Wednesday with only a handful of US releases, namely the US Pending Home sales, the Richmond Fed Manufacturing index, and oil stocks figures worth mentioning.

Technical levels to watch