USD/JPY was capped at the descending 50 sma on the hourly chart while bulls step in to protect further losses in the broader bearish trend supported by the 20 sma on the same time frame.
The dollar has been on the back-foot this week as markets try to assess risks going forward and timings of when, or even if, the Fed can realistically continue normalizing rates in the US this year.
Meanwhile, the BOJ became the fifth central bank in the world to enter a negative interest rate policy, with hints of more if need be and this adds a bullish case for the major. Data will continue to be in focus next week for the US with retail sales for January and Michigan Confidence in February. Yellen also testifies before congress at Capital Hill and markets will be looking to see whether she is remaining optimistic on growth and inflation.
USD/JPY levels
Technically, spot recently charted a key week reversal from a low of 115.97 level and the price is retargeting this area on a third attempt since August business. This has been a support level since December 2014. A break of here would open a new leg lower in a fresh range targeting 112.46 and 29th October 2014 highs. To the upside, the 20 dma stands at 118.21 and the 200 dma stands at 121.44 for a full recovery of the 2016 downtrend.
(Market News Provided by FXstreet)