USD/JPY: bearish bias, plenty of risk out there, where next?

• USD/JPY: all eyes on BoJ this week.
• USD/JPY: risks in European politics and trade wars on the cards this week.

USD/JPY is currently oscillating around 105.50 after a bearish opening gap on the risk around the Italian election results and the trade war theme marking a low of 105.42. 

Also, there is an undercurrent lead by recent remarks from BoJ's Kuroda last week that drive a bid into the yen. Kuroda, in parliament, said that the bank would consider reducing MP by as soon as 2019 when he thinks the inflation target will have been met. So for the trade today, markets are keeping an eye on EUR/JPY on the political front, stocks and risk appetite with an ear to the ground for retaliation from the global trade war wires. 

BoJ expectations? 

Meanwhile, for the week ahead expectations are that the Bank of Japan will maintain its current monetary policy, and the focus at the governor’s press conference will be on questions regarding strong yen against dollar. 

"Governor Kuroda may well again emphasize that the BOJ is persisting with monetary easing," analysts at Nomura explained.

USD/JPY levels

From a technical point of view, Valeria Bednarik, chief analyst at FXStreet explained that the daily chart shows that the pair is well below its 100 and 200 DMAs, while the RSI retains its bearish slope near 31 after three consecutive declines supporting the ongoing trend. "In the 4 hours chart, the pair has barely corrected higher, holding far below bearish 100 and 200 SMAs, and with technical indicators having bounced from oversold readings, still well into negative territory."