The Dollar dropped to an overnight low at 106.99 after the Bank of Japan pledged to keep buying unlimited amounts of government bonds and keep borrowing costs low. This was widely expected, and we saw USD/JPY tumble from its 107.50 opening. USD/JPY was trading at 107.25 in early Asia, unchanged from its New York close.

Overnight, the US 10-year bond yield rose 6 basis points to 0.66% while Japan’s 10-year JGB yield dropped 2 basis points to -0.05%. Which will support the USD/JPY pair at current levels. Meantime the latest Commitment of Traders/CFTC report (week ended 21 April) saw net speculative JPY bets increase to +JPY 26,026 from the previous week’s +JPY 22,643. The change was the largest among the 10 IMM currencies. Which is USD supportive.

USD/JPY has immediate support at 107.00 followed by 106.70. Immediate resistance can be found at 107.60 followed by 108.00. Look to buy dips in a likely 107-108 range today.