FX Analysis – USDJPY surges post BoJ, AUDUSD drops on dovish RBA, USD bid ahead of FOMC

JPY was the currency everyone was watching coming into the pivotal BoJ meeting on Tuesday. The BoJ, as widely telegraphed, ended 17 years of negative interest rates, ETF purchases and their yield curve control policy. While a big move from the central bank there was no real surprise, with USDJPY surging to touch on 151, well into the “intervention zone” above 150.

The US Dollar Index was bid on JPY weakness, seeing DXY briefly rise above 104.00 to a peak of 104.06 in the UK session before paring some gains head of today’s closely watched FOMC meeting.

AUDUSD dropped to 1 week lows  after the RBA rate decision which left rates on hold as expected, but pulled back slightly on the tightening bias namely a language change from “further increase in interest rates cannot be ruled out “ to  “not ruling anything in or out on interest rates” . NZD saw weakness in sympathy of the Aussie although AUDNZD saw marginal gains but failed to breach 1.08 with a high of 1.0793.