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USD/JPY downside playing out testing bulls commitments

FXStreet (Guatemala) - USD/JPY is currently trading at 122.43 with a high of 122.97 and a low of 122.29.

USD/JPY ha continued on the downside with some potentially limited Yen strength coming through to tests bulls commitments below the 123 handle having made a low of 122.29 while the latest trade figures helps dampen upside potential in the USD/JPY.

However, the BoJ recently left its monetary policy intact but also added a phrase about the weakness of price developments. A dovish sounding BoJ leaves the Yen vulnerable to the downside although the likelihood of imminent BoJ easing is still low.

Analysts at NAB explained, "Inflation remains modest, with the core (ex fresh food) CPI measure declining by -0.1% over the year to September. The Bank of Japan (BOJ) has pushed back its forecast for Japan achieving the 2% inflation target to the second half of fiscal 2016."

USD/JPY levels

Technically, Valeria Bednarik, chief analyst at FXStreet explained that the 1 hour chart shows that the price is near its daily high around 0.7250, and above a bullish 20 SMA, but that the technical indicators are losing upward strength well above their mid-lines, suggesting some consolidation ahead. "In the 4 hours chart, however, the upside remains favored with a break above 0.7249 last week high required to confirm further gains towards the 0.7330 region."

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