The low of 145.90 came early in European morning trade and we are now roughly 80 pips above that. Despite the light recovery in the last two hours, the pair is still roughly down by 100 pips on the day but the price action is nevertheless encouraging for dip buyers. There’s certainly a case for that if you look beyond the headlines involving BOJ Ueda’s remarks.
For now at least, I want to say that there might be another wave of selling that could hit later in early US trading. That could be traders reacting to what has transpired since Asia trading today but once the dust settles, it could be a case where yen shorts start to come back into the picture – especially if the BOJ is all talk but no play.
I’d keep a watchful eye on USD/JPY for today, as it will also impact dollar sentiment and more broadly, equities sentiment as well if we really do get a reversal of fortunes later in the day.