USD/JPY consolidates near 131.60 after huge move set-off by BoJ

• USD/JPY bears steamrolled their way in. bursting out of a coil and now eye further downside. 
• Bank of Japan tweaks policy in a surprise move, sending the Yen on a tear.

USD/JPY is down some 3.8% ahead of the close and roll-over on Tuesday having dropped strongly due to the Bank of Japan's surprise policy tweak. The pair dropped from a high of 137.47 to a low of 130.56.

The Bank of Japan kept broad policy settings unchanged, pinning short-term JGB yields at -0.1% and the 10-year yield around zero. However, the volatility in the markets was set off when the BoJ announced it would let long-term yields move 50 basis points on either side of its 0% target, wider than the 25 basis point band previously. Consequently, the yen soared and broke out of a coil that was highlighted din the pre-BoJ analysis as illustrated in the following technical analysis.

USD/JPY technical analysis

As per the prior analysis, USD/JPY Price Analysis: Could be coiling ahead of a significant breakout, where it was stated that USD/JPY was in a state of consolidation, coiling below the breakout of the daily trendline support of the prior bullish cycle, the breakout occurred as follows:

USD/JPY update

The bears moved in on the first target near 130.50. At this juncture, a continuation towards 129.50 and then 126.50 is on the cards albeit with some volatility along the way is to be expected.