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Forex: USD/JPY bounces after kissing 94.00 line

FXstreet.com (Barcelona) - After yesterday’s move to 93.54 low just as Fed’s Bernanke gave his speech, the USD/JPY eventually recovered ground back to 94.00 area and went as high as 94.45. Early European flows invited the pair to test the 94.00 psychological level before engaging in a new upside attempt, currently peaking at 94.36.

The market is quite calm during the European morning, with not much going on besides of French consumer confidence at 84 (from 86 and below 85 consensus) and ECB’s Couere reply to Dijsselbloem comments made yesterday. ECB’s Couere said he doesn’t agree with Dijsselbloem and the Cyprus bailout is not a new model for Europe, adding that there’s no reason to think French banks have the same problem as Cyprus. Also, he indicated that the troubles in Cyprus only show the need for ECB to be independent supervisor of banks in Europe.

BoJ Governor Kuroda spoke before the Japanese parliament today, but didn’t trigger market moves. He said the central bank will do whatever it takes to end deflation, has not been buying enough in terms of size, type of asset, and will consider extending bond maturities – increasing purchases of long term bonds. He also said it is hard to set nominal GDP as a target.

“USD/JPY is sitting just above the 4 month uptrend at 93.21. It is still expected to trade between this week’s 93.45 low and last Friday’s 96.28 high”, wrote Commerzbank analyst Karen Jones, targeting 99.70 (50% retracement of the 2007 to 2011 drop) and then 101.27/67 (the 1999 and 2005 lows) longer term.

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