USD/JPY extends BOJ-led up-move, hits weekly high beyond 115.00 mark

The Japanese Yen continues to weaken across the board, with the USD/JPY pair building on to its momentum back above 115.00 psychological mark to fresh weekly high. 

Friday's BOJ decision to increase purchases at regular JGB-buying operation was seen as a message that tapering of the central bank's asset-purchase program is off the table at is policy meeting on Tuesday next week. BOJ action, coupled with resurgent in the US treasury bond yields, turned investors mindful of the interest-rate differentials and helped the major to build on Thursday's strong up-move. 

Adding to this, comments from Japanese PM Abe, noting that deflationary pressures still persist in the economy, extended little support to the Japanese Yen and hinder the pair’s strong up-move. Government data released on Friday showed, Japan's consumer price index dropped 0.3% in 2016, its first annual fall in four years. 

Meanwhile, the prevalent strong risk sentiment also drove flows away from traditional safe-haven assets and prompted further selling pressure around the Yen, lifting the pair back above 50-day SMA hurdle to weekly high near 115.20-25 region.

Focus now shifts to the US economic docket, featuring the release of advanced US GDP growth for Q4 2016 accompanied by monthly durable goods orders, which would provide fresh impetus for the US Dollar’s ongoing recovery move from yesterday’s 7-week low. 

Technical levels to watch

Immediate resistance on the upside is pegged at 115.35 level above with the pair is likely to head towards 115.75 horizontal resistance, en-route 116.00 round figure mark.

On the downside, weakness below 115.00 mark now seems to find support at 50-day SMA near 114.85 region, which if broken might drag the pair back towards 114.30-25 horizontal support.