USD/JPY signals that the BOJ still has a problem on its hands

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USD/JPY signals that the BOJ still has a problem on its hands

<p>USD/JPY is now flat on the session at 128.12 after touching as high as 131.57 in the aftermath of the BOJ decision. </p><p>The BOJ might have burned the short-term specs but it looks like the strong hands used the higher levels to reload. Ultimately, the BOJ will have to normalize and owning <a href="https://www.forexlive.com/centralbank/why-the-best-trade-is-to-be-long-jpy-into-the-boj-deutsche-bank-20230117/" target="_blank" rel="follow">more </a>than 100% of some Japanese government bonds is not a recipe for long-term QE.</p><p>Adding to the weakness in the last 30 minutes was a <a href="https://www.forexlive.com/news/us-december-retail-sales-11-vs-08-expected-20230118/" target="_blank" rel="follow">weak US retail sales </a>report. That's added to speculation that the Fed won't get above 5% and may have to cut later this year.</p><p>There could be some stops below 128.00 but I wouldn't expect large ones. Kuroda is scheduled for a Friday interview in Davos on CNBC at 1000 GMT (5 am ET) and that's going to be an interesting one.</p>

                This article was written by Adam Button at www.forexlive.com.

Source: USD/JPY signals that the BOJ still has a problem on its hands

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