• Yen is hit hard n the back of a uber dovish BoJ.
• AUD/JPY rockets but there is daily resistance on the horizon.

The yen has dropped across the board following an uber dovish Bank of Japan meeting that has seen USD/JPY shoot towards 130 the figure in a parabolic rally of around 130 pips. This has pulled AUD/JPY higher within its correction on the daily chart by some 65 pips so far. 

AUD/JPY is currently 0.66% higher on the session so far at 92.07 and has travelled from a low of 91.32 to a high of 92.24. While the BoJ was expected to keep its existing ultra-loose policy settings, the yen tumbled as the central bank announced its plan to conduct unlimited fixed-rate bond purchase operations every business day "until it is highly likely that no bids will be submitted".

More on this here:

• Breaking: Bank of Japan keeps policy steady, tweaks forward guidance, yen at fresh session lows, 129.52+

Meanwhile, this leaves a compelling opportunity on the charts of the contrarian traders, if considering the risks to global growth and the Aussies' high beta status. While there is a case for a supported AUD on the back of hotter than expected inflation and a faster rate hike timetable from the Reserve Bank of Australia, the backdrop is pessimistic in the global economy and external factors are weighing the currency down. If yen weakness is faded, then there would be prospects of a downside continuation as per the following daily chart:

AUD/JPY technical analysis

A correction of the bearish impulse into resistance and the confluence of the Fibonacci levels could be the fuel for bears to move in again for a downside extension in due course. the 38.2% and 50% ratio retracements align with prior lows on the daily chart.