AUD/JPY trading sub 97.00 ahead of BoJ

FXStreet (Bali) - AUD/JPY is trading just below the 97 handle after a startling recovery since January 14 this year, rising over 3 cents from sub 94.50 to peak at 97.38 during last European session.

JPY traders area now awaiting the outcome of the BoJ meeting, in which no QQE change in policy is expected, thus we should not see a major impact in Yen crosses. However, as Nomura notes, "the BOJ is very likely to reduce its FY2015 inflation forecast from 1.7%, as oil prices have declined since October; the magnitude of this reduction is worth monitoring." A yen mover could be the BOJ Governor Kuroda press conference though, "likely to remain relatively optimistic on the inflation outlook, even after the likely lowering of inflation forecasts, as he will likely emphasize the importance of incoming wage negotiations again" Nomura adds.

Technically, on the hourly, AUD/JPY is trading marginally below its 20-EMA, with 96.70 immediate support - as per US low - followed by 96.50 - intersection 100/200-EMA - ahead of a possible deeper penetration towards 96.00. On the upside, the area between 97.00 and 97.50 remains a sellers' strong-hold.