EUR/JPY wipes-off post-BOJ gains, turns flat at 113.45

In the post-BOJ price action, the EUR/JPY cross swung nearly 200-pips from multi-week lows and surged past 114.00 handle. The pair, however, seems to have lost its upside momentum and has now retraced back to currently trade around 113.50-40 band.

The pair's initial slide to 112.50 region on the back of disappointment from BOJ interest rate-decision, was bought into as the central bank showed readiness to continue with its aggressive monetary easing measures until inflation exceeds 2% target.

As the post-BOJ announcement press conference got underway, the cross came under renewed selling pressure and reversed part of its strong gains as the decision to not cut rates further into negative territory might have disappointed some investors.

Moreover, offered tone around the EUR/USD major also seems to exert some selling pressure around the EUR/JPY cross. With BOJ decision out of the way, focus shifts to the Fed monetary policy stance, which would derive demand for both the Japanese Yen and the shared currency, and eventually drive the cross.

Technical levels to watch

Renewed weakness back below 113.00 handle might now turn the pair vulnerable to break through session low support near 112.50 and head towards testing August lows support near 112.30 level.

On the upside, a fresh bout of buying interest above 113.85 resistance would increase possibilities of a further up-move beyond session peak resistance near 114.30 level towards 115.00 psychological mark.