The USD/JPY is consolidating following a muted reaction to yesterday's emergency BoJ meeting. As we highlighted in yesterday's commentary, the BoJ made 10 trillion Yen available for loans to commercial banks at the central bank's 0.1% benchmark rate. Investors still don't seem too impressed by the results of yesterday's emergency meeting since many bulls were hoping for more excessive QE measures. Therefore, although yesterday's decision by the BoJ may have stabilized the USD/JPY, thus far it hasn't been enough to cause any noteworthy devaluation of the Yen. Hence, it will be interesting to see whether Japan's Finance Ministry applies more pressure on the BoJ to use more tools to fight a strengthening Yen. Meanwhile, focus is shifting back to the EU and U.S. The ECB will make a monetary policy decision of its own tomorrow and the U.S. will release weekly Unemployment Claims along with ISM Non-Manufacturing PMI data. Hence, FX markets could be in for a busy 24-48 hours.

Technically speaking, 85 continues to serve as a psychological cushion while 90 hangs far overhead. Should conditions deteriorate below 85, we notice that the 82.50-85 area proved to be a strong support area during the Spring/Summer of 1995. Therefore, the USD/JPY could experience similar support should the currency pair's downturn continue. As for the topside, there are multiple downtrend lines serving as technical barriers along with Tuesday's highs as the long-term downtrend bears down on price. Hence, the USD/JPY has its work cut out for it to the topside should the currency pair want to re-challenge the highly psychological 90 level. Meanwhile, an encouraging development would be for the USD/JPY to move back above January '09 and October '09 lows.

Present Price: 87.07

Resistances: 87.36, 87.51, 87.72, 87.82, 87.94, 88.13, 88.39

Supports: 86.96, 86.69, 86.49, 86.30, 86.14, 85.99, 85.74

Psychological: 85, 90, 80