USD/JPY flat lined above 117.00 ahead of BOJ policy decision

The Dollar-Yen pair trades flat lined around 117.15 this Tuesday morning as traders await guidance from the Bank of Japan (BOJ) on how it intends to manage the long-term yields.

Focus on BOJ’s forward guidance

The central bank is expected to keep the key tools unchanged. Moreover, the focus is on the BOJ's take on the rising global yields and how it intends to manage to the yield curve control.

There is widespread belief that the central bank may have to raise its 10-year yield curve target to 0.4% by 2018 from the current zero percent in the wake of rising Treasury yields.

Kuroda’s comments on the pace of decline in the Japanese Yen would be watched out as well.

USD/JPY Technical Levels

A break above the upward sloping 5-DMA level of 117.47 would expose 117.97 (previous day’s high), above which the gains could be extended to 118.66 (Dec 15 high). On the other hand, a breakdown of support at 117.00 (zero figure) could yield a sell-off to 116.04 (10-DMA) and then to 115.37 (Dec 9 high).