USD/JPY testing highs near 115, BOJ bond-buying underpins

The USD/JPY pair is on a roll higher so far this Friday, as yen continues to get battered across the board, this time on the BOJ announcement.

The BOJ stepped-in to buy JGBs in the 5-10 year maturity range earlier on the day, which eased fears that the central bank could provide some hints on tapering at its policy decision to be held next week.

The spot was last seen exchanging hands near 5-day highs of 115.06, struggling to rise further beyond 115 handle, still up +0.39% on the day. The major also garners strength from return of broad USD demand as the US treasury yields regain edge over its Japanese counterpart amid BOJ bond-buying.

Moreover, the yen also suffers from mixed Japanese inflation data, which showed that the CPI fell for the first time in four years. While core CPI figures dropped less expected, coming in slightly upbeat at -0.2%.

Focus now shifts towards the US dataflow due later on the day, while Trump headlines will continue to have a significant impact on the USD price-action.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 115.26 (daily R1). A break above the last, the major could test 115.65 (50-DMA) and 116 (zero figure) beyond the last. While to the downside, the immediate support is seen at 114.71 (20-DMA) next at 114.14 (daily pivot) and below that at 113.87 (5-DMA).