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Yen Set for Dollar Gains With Kuroda on Hold: Technical Analysis

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April 8 (Bloomberg) -- The Bank of Japan’s decision not to add to unprecedented monetary stimulus has the yen poised to breach a key technical level, which may see it strengthen to a two-month high, according to JPMorgan Chase & Co.

The yen is approaching a range between 102.10 and 101.90 per U.S. dollar that, if breached, could allow it to gain to the February high of 100.75, Niall O’Connor, a technical analyst at JPMorgan, said regarding a note to clients today. Bank of Japan Governor Haruhiko Kuroda highlighted a pickup in private investment and increasing industrial production as he maintained the pace of monetary expansion today.

“It implied they’re on hold, and it looks like they’re going to be on hold for a while, so it took away a potential bearish factor for yen,” O’Connor said by phone from New York. “Given how sharp the move has been there’s certainly the risk dollar/yen can extend lower.”

The yen strengthened for a third day today, adding 1 percent to 102.08 per dollar at 12:35 p.m. in New York.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.

To contact the reporter on this story: Ari Altstedter in Toronto at aaltstedter@bloomberg.net

To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net Kenneth Pringle, Greg Storey