AUD/JPY drops as BOJ holds monetary base unchanged, expands ETF buying

JPY spiked, sending AUD/JPY cross down to 77.50 levels after Bank of Japan kept all main policy tools unchanged.

Increase only in ETF purchases is disappointing

Markets are clearly not happy with Bank of Japan holding interest rates, JGB purchases and monetary base unchanged. The central bank bulked up its ETF purchases but that has not impressed markets.

Consequently, Yen strengthened across the board. AUD/JPY cross was last seen trading around 77.50 levels. The pair clocked a high of 79.51 earlier today.

AUD/JPY Technical Levels

A breach of immediate support at 77.00 (50% of Brexit day drop) would open doors for a drop to 76.71 (June 17 low), under which the cross could target 75.59 (June 16 low). On the other hand, a breach of resistance at 78.08 (61.8% of Brexit day drop) would open doors for a re-test of 79.00 – 79.51 (daily high).