The BoJ is sending the Japanese yen down across the board.

EUR/JPY close to a year-to-date record at 133.15

This week, the euro rallied against the Japanese yen. The pair has extended its recovery from March lows at 123.44, to test the 131.90 resistance level. On sight, it is at 133.15, which is the highest point for the year.

The yen plunges after a dovish BoJ

The common currency is poised for a weekly rally of nearly 3%, supported by broad-based weakness in the yen as the Bank of Japan’s dovish policy stance has allowed the euro to retrace most of its ground lost in February.

At its latest monetary policy meeting, the Bank of Japan confirmed its extremely expansive monetary policy. Despite rising inflation trends, the bank promised to continue its massive stimulus program. The BoJ's stance on monetary tightening is causing a severe increase in yen demand, as most major central banks around the globe are moving towards monetary tightening.

Despite the sour market mood due to the inability to make progress on the Russia – Ukraine peace talks, Yen's weakness has helped the EUR/JPY extend its rally for the sixth day. This has added negative pressure on euro.

EUR/JPY - Above 131.90. Next significant target is the YTD high of 133.15

The pair appears to have encountered resistance at 131.90 (February 16th high). If this level holds, the next target would be 132.60 on February 11, ahead of a retest at the year-to date high of 133.15.

A bearish reversal at below the intraday low at 131.35, and March 17 low of 130.70 could seek support at the 200=day SMA at the 130.00 region.