The Japanese yen weakens as the BoJ keeps interest rates unchanged and signals no urgency for further tightening

USD/JPY surged by more than two figures on Friday after the Bank of Japan left interest rates unchanged and indicated no rush for future hikes, despite borrowing costs remaining very low.

This renewed push higher follows Thursday’s rally, which was of nearly the same size but stalled just below the 144 level, with a subsequent pullback forming a daily candle with a long upper shadow. This could be a cautionary sign, despite today’s strength, as key resistance levels at 144.29/45 (the 61.8% Fibonacci retracement of the 147.21/139.57 move and daily Kijun-sen) must be cleared to reduce ongoing downside risks.

Daily technical indicators are mixed, with bearish signals coming from strong negative momentum, a thickening descending daily cloud, and an overbought stochastic. However, this is partially offset by the 10- and 20-day moving averages turning bullish.

The recent recovery is expected to remain in play as long as the pair holds above the 20-day moving average (143.42). However, the broader outlook will stay bearish unless price action breaks above the daily Kijun-sen.

Res: 144.45; 145.00; 145.40; 146.07
Sup: 143.42; 142.49; 142.27; 142.00