Forex: USD/JPY volatile on BoJ and candidates for Governor

Thursday trading started with a spike down to 93.14 low followed by a spike up to 93.64 on volatility caused by the BoJ monetary policy, which was left unchanged as Governor Shirakawa is at the end of his term. As the USD/JPY trades with European money, the market went to test its highs and extended to 93.71. As of writing, the pair quotes around 93.50.

According to UBS analysts, more volatile than the BoJ decision were remarks by Kazumasa Iwata, one of the candidates for BoJ Governor: "He reportedly said that a yen correction is needed to reach the 2% inflation target, and that USDJPY in the range of 90-100 is just a return to equilibrium", wrote analysts Geoffrey Yu and Gareth Berry.

Commerzbank analysts are biased to the downside: "USD/JPY is holding sideways and looks set to ease back to its 240 minute cloud (currently at 92.20). The intraday Elliott wave count is indicating a deeper retracement to 91.40 and possibly 89.55 is likely prior to another leg higher", wrote analyst Karen Jones.