For the 24 hours to 23:00 GMT, the USD declined 0.14% against the JPY and closed at 111.88.
In the Asian session, at GMT0300, the pair is trading at 111.98, with the USD trading 0.09% higher against the JPY from yesterday’s close.
The Japanese Yen lost ground, after the Bank of Japan (BoJ) downgraded its outlook for inflation at its latest monetary policy meeting.
The BoJ kept its interest rate unchanged at -0.1%, as widely expected. However, in a quarterly review of its long-term projections, the central bank lowered its inflation forecast for the current fiscal year ending in March 2018 to 1.1% from 1.4% it forecasted three months ago. Further, the central bank pushed back the time frame for achieving its 2.0% inflation target, stating that it would be met sometime during fiscal 2019. The central bank had previously stated the target would be achieved in fiscal 2018. Nevertheless, the BoJ raised its forecast for GDP growth for the current fiscal year to 1.8%, from 1.6% estimated earlier.
On the data front, Japan’s adjusted merchandise trade surplus surprisingly narrowed to a level of ¥81.4 billion in June, defying market expectations for it to widen to a level of ¥127.5 billion. In the preceding month, the nation had reported a revised surplus of ¥122.7 billion.
On the other hand, the nation’s all industry activity index eased more-than-anticipated by 0.9% on a monthly basis in May, compared to a revised advance of 2.3% in the previous month. Market participants had expected the index to ease 0.8%.
The pair is expected to find support at 111.62, and a fall through could take it to the next support level of 111.25. The pair is expected to find its first resistance at 112.29, and a rise through could take it to the next resistance level of 112.59.
The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.