NZD/JPY holding on to 77.50 as BoJ freezes on rates

• Kiwi climbs on North Korea headlines, hesitates on tariff drama.
• BoJ stands pat on rate changes, push expectations out as far as possible.

The NZD/JPY pair is on the top side heading into the European market session, testing near the 77.50 handle.

The Kiwi got some wind into its sails in the early Asia markets with the Yen receding on a spurt of market confidence brought on by a surprise invitation from North Korea's Kim Jong-un for US President Donald Trump to meet with North Korea's supreme leader this sometime before this May. However, it wasn't long before risk appetite soured as markets remembered that Trump just signed a proclamation to impose a 25% import tariff on steel and a 10% tariff on aluminum crossing the US border. The tariffs are expected to come into effect in the next fifteen days, and the only exemptions provided so far are for Canada and Mexico, and even those have been made conditional on a successful renegotiation of NAFTA.

The Bank of Japan (BoJ) dropped their Interest Rate Decision and Monetary Policy Statement early Friday, and the Yen found little to trade about as interest rates and the central bank's plans moving forward remain unchanged. With inflation still lagging far behind the BoJ's 2% target, it is unlikely the central bank will begin changing their policy stance anytime soon.

NZD/JPY Technicals

The pair is deeply into bearish territory, trading far below the 200-day SMA which sits at 79.73, while H4 candles have the NZD/JPY making a bid to price in a higher low following a correction from the recent low-point of 75.93. Resistance is currently resting at last week's high point of 78.31, with support also from last week's swing low into 76.60.