As expected, the Bank of Japan today left its interest rate unchanged at -0.1%. The accompanying statement remained virtually unchanged: the central bank reassured that it could raise the rate once suitable conditions emerge or ease its policy if its long-term inflation target again becomes a remote prospect. Therefore, the impact on the yen was minimal, if any. USDJPY focus shifts back to greenback-related drivers, particularly nominal interest rates on U.S. Treasury bonds, which have been steadily rising due to growing inflation expectations and the consistently centrist stance of the Federal Reserve, which has clearly tolerated this trend in recent meetings. Japanese authorities stated in August that they do not target the exchange rate (they intervened last time around 145), thus removing a barrier to further depreciation, which is why the price has continued to decline steadily. Technical analysis suggests that the pair should test the round level of 150 before it can enter a stable correction:

As expected, the Bank of Japan today left its interest rate unchanged at -0.1%. The accompanying statement remained virtually unchanged: the central bank reassured that it could raise the rate once suitable conditions emerge or ease its policy if its long-term inflation target again becomes a remote prospect. Therefore, the impact on the yen was minimal, if any. USDJPY focus shifts back to greenback-related drivers, particularly nominal interest rates on U.S. Treasury bonds, which have been steadily rising due to growing inflation expectations and the consistently centrist stance of the Federal Reserve, which has clearly tolerated this trend in recent meetings. Japanese authorities stated in August that they do not target the exchange rate (they intervened last time around 145), thus removing a barrier to further depreciation, which is why the price has continued to decline steadily. Technical analysis suggests that the pair should test the round level of 150 before it can enter a stable correction:

The steep drop in price has almost brought the market to the lower boundary of the ascending channel, which has a high chance of being tested. This is roughly in the range of 4260-4300. The fundamental situation in the U.S. economy as a whole does not raise concerns (especially considering the latest unemployment claims data, which set a new weekly minimum at 201K), so in my view, a full-fledged bear market has limited chances. Just below the lower channel line, there is the 200-day moving average, which is also a strong support level.