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BoJ Offers Tame Statement - USD/JPY Awaits Yellen

The BoJ statement today did not give us anything new about its policy. It is maintaining the current rate of stimulus which is to add 60-70 trillion yen to the country's monetary base. 

There was a slight downward revision on growth outlook, but it was nothing significant. The bank also does not seem concerned about the effects of the recent rate hike, which could hamper domestic demand. Instead it is exports that seem to be leveling off. The Inflation forecast remains to the upside.

The tame BoJ statement did not effect the JPY pairs much. USD/JPY traders are likely turning focus to Janet Yellen's 2-day testimony in front of congress, starting Tuesday (7/15).

USD/JPY 4H Chart 7/15

The 4H chart shows a pair trading in the middle of a falling channel. The 102 level will be key for the next couple of days. If Janet Yellen is hawkish, and the USD/JPY climbs above 102, the market is likely respecting the 100.75 low on the year and has upside risk toward July's high of 102.75, up to the 103 pivot. If she is dovish, USD/JPY will likely be pressured toward the 100.75 low on the year. Status quo, or unclear guidance should keep USD/JPY neutral to slightly bearish.