The Japanese yen has been slammed lower in Asian trade on Monday, falling to a eight-month low against the US dollar.
Here’s the 5-minute USD/JPY chart.
And here’s the USD/JPY daily chart showing the yen at its weakest level since mid-March.
The sudden bout of weakness appears to have been a reaction to a speech delivered by Bank of Japan (BoJ) Governor Haruhiko Kuroda to business leaders in Nagoya.
According to wire reports from Reuters, Kuroda said the BoJ was still some distance away from achieving its 2% inflation target, acknowledging that it was crucial for people to actually experience inflation above 2%.
He also said the bank will continue with “powerful monetary policy easing”.
Although nothing new to what’s been previously said, the words have clearly resonated with traders who have pushed the USD/JPY through resistance layered above 114.50, triggering stop-loss orders as a consequence.
It could be an attempt from Kuroda to point out the widely divergent policy outlook for US and Japanese interest rates, especially at a time when US President Donald Trump is in the country.