The volatility for USDJPY increased after the Bank of Japan kept its interest rate targets unchanged. It left its short-term interest rates at -0.1% and the target for its 10-year bond at zero. The BoJ reiterated it will defend the 10-year yield at 0.5%.

As a result, the USDJPY has appreciated, with the currency pair heading towards its R4 pivot (green vertical rectangle). An R4 day is rare. The price is being driven by short-covering and renewed long positions – the market had felt that the BoJ’s yield curve control may be abandoned. It is now readjusting.

The post USDJPY jumps as yield curve control maintained appeared first on FXCM UK.