USD/JPY: beaten hard with a stick, lack of story behind the move

USD/JPY has been hit hard, perhaps a prelude as to what is to come later today in the Asian shift from the BoJ meeting?

USD/JPY is volatile in early Asia while we await the BoJ that is still on a knife edge, and should the BoJ disappoint, the Yen could gather some strong support, but the markets are anticipating some big action today with Abenomics 2.0 in full effect with a multiple of possibilities that the could be pulled from the sleeve of the Central Bank. "Probably the market highlight for the day, the Bank of Japan is expected to put asset purchases and rates on the table, including an expansion of equity purchases and debt instrument available to buy. Also possible are cuts to deposit rates and lending rates, and potentially other liquidity measures," explained analysts at Westpac.

USD/JPY levels

103.36 is the low in Asia and we have seen a recovery back to and through the mid-point of 104.00 within the same 30 min stick. the move took out the previous support at 104 with ease and will have no doubt been exacerbated on sell stops left overnight as the majority would be expecting a bid USD/JPY on the BoJ's possible action. Should the 103 handle give out on a break of June 30th highs and recent support, 102.20 is next key downside level. On the upside, 106.50 is a key target that guards 107.50 and 20th July highs.