USD/JPY drops on Kuroda's powerful jawboning

• USD/JPY has faded the spike to 107.19. 
• The rising Yen turns a blind eye towards Kuroda's dovish comments. 

The USD/JPY pair reversed early gains and now trades 0.12 percent lower on the day at 107.65. Also, the Japanese currency has appreciated 5 percent in the last 1.5 month. Meanwhile, the odds of a further drop are high considering the US budget deficit predictions. 

Hence, it is hardly surprising that Bank of Japan (BOJ) officials are resorting to jawboning. Bank of Japan (BOJ) Governor Kuroda's was out on wires a few minutes ago, stressing the need for continued powerful easing.

However, the dovish talk is not having the desired impact on the Japanese Yen. The currency pair hit a session low of 106.57 following Kuroda's comments. Moreover, the central bank head stuck to the script, meaning there was nothing in his comments that could take markets by surprise. 

Ahead in the day, the currency pair will likely remain on the back foot, unless there is a significant drop in the treasury yield (and a sharp rise in equities). Also, traders will look to new Fed Chair Powell's testimony to Congress (due later today) for clues regarding the path of rate hikes this year. 

USD/JPY Technical Levels

A convincing break below 106.51 (previous day's low) would open up downside towards 106.03 (Feb. 15 low). A violation there would expose the monthly low of 105.55. On the higher side, breach of resistance at 106.91 (10-day MA) could yield a re-test of 107.19 (session high), above which a major resistance is seen directly at 107.91 (Feb. 21 high).