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USD/JPY: Yen bulls fight back control on BOJ Sakura Report

FXStreet (Mumbai) - The USD/JPY pair ran through fresh offers near 119.45 region and accelerated to the downside following the release of the quarterly BOJ Sakura report.

USD/JPY capped below hourly 200-SMA

Currently, the USD/JPY pair trades -0.13% lower at 119.28, retreating towards daily lows struck at 119.14. The major halted its upbeat momentum and fell back in the red as the yen received fresh boost from the optimistic BOJ quarterly Sakura report (similar to Fed’s beige book), which assesses performance of nine regional economies.

The quarterly report published on Monday, showed that the Bank of Japan upgraded its assessment of the nation’s nine regional economies on the back of solid domestic demand and improving services sector.

Earlier in Asia, the USD/JPY pair jumped back on the bids and witnessed a 40-pips rally in a knee-jerk reaction to the upbeat China’s GDP figures, which boosted the risk-sentiment somewhat. The Chinese economy expanded 6.9% annualized last quarter, against 6.8% expectations.

Looking ahead, the dollar-yen pair will continue to track the broader market sentiment with little on the cards in terms of economic data. While a set of speeches from Fed officers’ will be closely eyed.

USD/JPY Technical levels to consider

The pair holds remains supported above 119 handle eyeing the next resistance located at 119.55/58 (daily R2 & highs) beyond which 119.82 (20-DMA) could be tested. Above the last, the pair could climb further towards 120 barrier. While to the downside immediate support might be located at 119.14/15 (daily lows & 5-DMA), below which 118.80 (Oct 16 Low) could be exposed. A breach of the last, the pair could drop to 118.65/62 (Sept 7 & Oct 14 Lows).

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