USD/JPY: becoming volatile again around Abenomics 2.0

USD/JPY spiked back to the 106 handle after a strong performance from 107.25 down to 105.41 earlier.

USD/JPY had been supported on the idea of Abenomics 2.0, but the Yen caught a strong bid when there were rumours overnight that Kuroda spoke out against implementing "helicopter money," sending the pair into a volatile situation of a 200 pip roundturn. 

However, the bounce has come in early Asia as the Nikkei reports Japan's stimulus package as 30tln yen of fiscal spending.

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart, "Technical indicators have crossed their mid-lines into negative territory, maintaining their downward slopes, also indicating high chances of a downward continuation for the upcoming sessions." 

"We remain unable to rule out dips to 105.30/104.30 ahead of another leg higher and ideally we would like to see a close above 107.32 to confirm upside intent," explained analysts at Commerzbank. "The 107.32 resistance line guards the 108.78/78.6% retracement, which is the last defence for 111.45 May high. The market stays immediately bid above the 103.55 support (16th June low)."