USD/JPY remains below 50-day SMA after BOJ boosts virus lending program

• BOJ's boosts the coronavirus lending program and leaves interest rates unchanged. 
• The rate decision has so far turned out to be a non-event for USD/JPY. 
• Risk-on could keep USD/JPY sidelined below the 50-day SMA.

USD/JPY continues to trade below the 50-day simple moving average (SMA) of 107.53 following the Bank of Japan's (BOJ) status quo interest rate decision. 

The central bank kept interest rates unchanged at -0.10% as expected and retained the yield curve control program, as expected. The bank, however, raised the special coronavirus lending program's size to JPY 110 trillion from JPY 75 trillion. 

The bank added that the Japanese economy is likely to remain in severe situation for time being and both short and long-term rates are expected to remain at current [low] levels. 

So far, however,  the BOJ's rate decision and comments on the economy have failed to boost volatility in USD/JPY. The currency pair witnessed a 10-pip spike to 107.50 immediately following the announcement of the increase in the virus lending program's size. However, the bounce was short-lived, possibly because the central bank was expected to boost the lending program. 

With the BOJ out of the way, the pair may not take cues from the broader market sentiment. At press time, the futures on the S&P 500 are reporting a 1.44% gain. The risk-on could be associated with the Federal Reserve's decision to buy corporate bonds and the news that President Trump is considering proving additional stimulus worth $1 trillion via infrastructure spending. 

Risk-on usually weighs over the anti-risk yen. However, the dollar has been treated as a safe haven since the beginning of the coronavirus outbreak. As a result, the uptick in the stocks is weighing over the US dollar and is likely to keep USD/JPY sidelined or under pressure. 

Technical levels