This morning, the Bank of Japan (BOJ) released its interest rate decision, keeping the rate unchanged as widely expected. According to Forex Factory, the BOJ Policy Rate remains at 0.5%.
BOJ Governor Kazuo Ueda noted the following:
→ Japan’s economy is recovering moderately.
→ The Bank will continue raising rates if economic and inflationary conditions improve.
→ The situation surrounding trade tariffs remains highly uncertain.
The fact that the decision was anticipated by markets is reflected in price action on the charts.
Technical Analysis of the USD/JPY Chart
A brief spike in volatility occurred on the USD/JPY chart this morning, but it did not significantly alter the broader structure of price movements, which in June have formed a contracting triangle pattern.
In recent days, the pair has been climbing from the lower boundary of the triangle toward the upper edge, forming a short-term ascending channel (highlighted in blue). However, in the near term, this bullish momentum may weaken as the USD/JPY rate approaches the upper boundary of the triangle, which coincides with the psychologically significant level of 145 yen to the dollar (indicated by arrows).
From a medium-term perspective, traders should watch for a potential breakout from the triangle pattern, which could trigger a meaningful trend. One possible catalyst could be news of a trade agreement between the United States and Japan.
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