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USD/JPY drops sharply 120.30 on Japan’s Honda

FXStreet (Mumbai) - A sudden bout of buying interest was seen around the Japanese yen following Japan’s PM adviser Honda’s comments, now pushing USD/JPY to fresh session lows.

USD/JPY tanks nearly 40 pips in a knee-jerk

Currently, the USD/JPY pair drops -0.25% to fresh session low of 120.36, fading a spike to 120.77 session highs. The USD/JPY pair extends the correction and witnessed renewed sell-off after the yen spiked on Japan’s PM adviser Honda’s hawkish comments.

Mr. Honda noted that, there is “no need for additional BOJ easing now,” squashing market expectations of BOJ announcing additional stimulus at its monetary policy meeting next week.

Moreover, the yen also benefited from the upbeat flash manufacturing PMI readings released earlier on the day. While broad based US dollar retreat on profit0taking after the recent strength also weighs on the major.

Meanwhile, focus now shifts towards next week’s FOMC and BOJ decisions amid a data-deficient macro calendar today.

USD/JPY Technical levels to consider

The pair dropped from 120.70 levels and now finds the immediate support might be located at 120.18 (50-DMA), below which 120 (round number) would be tested. While to the upside, the next resistance is located at 120.73 (10-DMA). Above the last, the pair could climb further towards 121 (Today’s High).

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