USD/JPY Remains Bearish

WikiFX News (29Oct.) - USD/JYP retreated to a five-week low of 104.21 on Wednesday. The pair is possible to edge lower considering both the Bank of Japan is expected to keep its monetary policy steady and haven inflows may buoy JPY amid the second wave of coronavirus in Europe.

The Bank of Japan(BOJ) Governors indicated that an additional economic stimulus package is unnecessary for the moment as the economy is headed for a moderate recovery. The BOJ will likely leave its yield targets unchanged at -0.1%, with the 10-year yield targeted at 0%.

Prime Minister Yoshihide Suga's newly introduced “Go to Travel” campaign, which offers subsidies for domestic travel, is cited as one of the major hindrances on consumer price growth.

In addition, Japan's number of coronavirus infections has notably stabilized since August, while the nation's composite PMI is expected to show the economy is continuing to recover from the contraction. With that said, lockdowns in Europe in response to the resurgence of the pandemic may encourage investors to divert capital into safe havens, which is a boost to JPY.

Technically speaking, USD/JPY remains bearish in recent days, thrusting the psychologically pivotal of 103.00 into the spotlight.

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Chart: Trend of USD/JPY