USD/JPY: consolidating back on the 100 handle on mixed outlook

USD/JPY is currently moving back on the bid, recovering from the sell-off at early Asian highs of 100.65 post the opening Kuroda inspired bullish gap.

USD/JPY was faded back to 100.29 after a bullish gap from 100.12 to aforementioned highs while Kuroda spoke out over the weekend that there is room for further cuts to already negative rates sparking a sell-off in the Yen in a short squeeze in USD/JPY. 

This comes after Prime Minister Abe recently stating that yen strength is “clearly excessive, and this is because…people think that it must be difficult to further loosen monetary policy”. 

Analysts at Bank of Tokyo Mitsubishi argued, that overall, they remain comfortable with their outlook for further yen strength, however adding, "It is likely to be more modest than experienced so far this year after the bulk of the yen’s undervaluation has been reversed now."  We will get more from Kuroda tomorrow.

Meanwhile, we have a quiet docket to start the week and focus remains with the Fed yet again due to recent hawkish comments from Williams and Dudley last week before US GDP and Yellen at the end of the week speaking at the Jackson Hole. 

USD/JPY levels

USD/JPY has rallied from a previous neutral position ahead of the 99.00 24th July low and is now consolidating just below the key resistance at 100.82 (previous Fibo) ahead of 102.83 and 2nd August highs. First, the 20 dma at 101.22 is a likely resistance ahead of the 50 dma at 101.72.