Global macro overview for 21/12/2016:
The Bank of Japan has left the overnight call rate unchanged at the level of -0.10% just as expected. Moreover, the 10-year JGB yield target is left at around zero %, and the buying of JGBs is still targeted at an annual pace of 80T Yen. In the Monetary Policy Statement, we can read, that vote on yield curve control was made by 7-2 vote (Sato, Kiuchi opposed decision on yield curve control). Moreover, there was an upgrade in the Bank's assessment of the economy. BOJ said Japan's economy continues to recover moderately as a trend and they revise up view on exports and output as they are picking up. Japan economy is likely to turn to a moderate expansion in the near future, but the risks to the outlook include developments in US economy, especially the impact of US monetary policy on global markets. In conclusion, nothing new from the Bank of Japan for this month, expect slightly bullish tone regarding the economic outlook.
Let's now take a look at the USD/JPY technical picture at the daily time frame. The bulls are clearly in control over this market for now as the price trades above all of the moving averages. In order to reverse the immediate bullish trend, the bears would have to push the price lower toward the level of min. 114.85. The current immediate support comes at the level of 116.14 and the next resistance is seen at the level of 118.65.
