Intraday analysis: USD/JPY pares losses as BOJ move digested

ForexNewsNow | Published on October 5, 2010 at 2:35 pm

Intraday analysis - BOJ chief ShirakawaNEW YORK (Forex News Now) – The yen pared earlier gains versus the dollar on Tuesday, as FX traders digested the Bank of Japan’s surprise decision to cut its key interest rate target to 0-0.1 percent from 0.1 percent.

In European afternoon currency market trading, USD/JPY hit 82.96, close to the 15-year low of Sept. 15, 82.87. The currency pair later rose slightly to trade at 83.2, down 0.18 percent on the day.

Early Tuesday, the Bank of Japan also announced that it would establish a new fund to buy potentially risky assets. The move came amid growing domestic pressure on the central bank from politicians threatening to curb its independence if it didn’t do more to boost growth.

According to intraday analysis, USD/JPY was likely to touch support around 82.87 and encounter immediate resistance around the high of Sept. 27, 84.39.

The yen’s gains also came after an industry report showed that activity in the U.S. non-manufacturing sector grew more than forecast in September.

Elsewhere, the yen slumped versus the euro: EUR/JPY traded at 115.28, up 1.06 percent, according to intraday analysis.

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