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USD/JPY selling off ahead of BOJ, 118.50 caps downside

FXStreet (Bali) - USD/JPYis coming under strong selling pressure ahead of the much-awaited BOJ monetary policy decision, with the spot trading near 118.50 last, new session lows, with last minute position adjustments taking place.

Inflation makes no progress ahead of BOJ

Earlier on the session, disappointing inflation and household spending data out of Japan only strengthened the case for the BOJ having to do more if they are to remain credible in achieving the 25 inflation target in due time, which at this time looks like a very difficult mission.

Read today's BOJ preview here: BoJ preview - what to expect in USD/JPY?

USD/JPY technicals

Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes: "Short term, the 1 hour chart shows that the price has been confined to a tight intraday range above its 100 SMA, the immediate support now around 1118.50. In the same chart, the technical indicators have turned south around their mid-lines, lacking directional strength at the time being."

"In the 4 hours chart, the pair is halfway between its moving averages, while the technical indicators have turned south, but remain above their mid-lines. The JPY may likely appreciate if the BOJ remains on hold, with a break below 118.10 opening doors for a steady decline on Friday."

AUD/USD: the quiet before the Chinese storm?

AUD/USD is consolidated and has been since the middle of the US session as we wind down for the week after a series of events that included the dovish FOMC and a bullish set of CPI numbers for the Australian economy.
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Asian stocks mixed ahead of BOJ, China rebounds

The stocks on the Asian bourses are seen trading on a mixed note on the final trading day of the big, with the Japanese stocks treading water ahead of the big event for this session, the BOJ policy decision.
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