The overnight Japan national CPI data slowed to 0.7% on yearly basis in April, down from 0.9% and below the expectations of 0.8%. That's the second month of decline and it moved further away from Bank of Japan 2.0% inflation target. It's also the lowest level since September 2017 and off recent cyclical high of 1.0% set in February. Overall CPI slowed to 0.6% yoy, down from 1.1% yoy. The other index of CPI, excluding food and energy, slowed to just 0.4% yoy, down from 0.5% yoy.

Recently, BoJ had abandoned the time frame for which the economy will meet the 2.0% inflation target. Moreover, the bank maintained the stance to continue with the ultra-loose monetary policy. Nevertheless, while recent surge in oil price could help raise overall and ex-food CPI ahead, the core CPI data remained worryingly weak. That's why the ongoing BoJ easying program cloud now is continuing without any particular deadline as there is still no inflationary pressures on the horizon.

Let's now take a look at the USD/JPY technical picture at the H4 time frame. The market keeps trading inside of a rising parallel channel and it made another local high at the level of 111.03 in overbought conditions. As long as the price will stay inside of the channel, the outlook remains bullish.The risks to this outlook are any safe haven flows which might see JPY strengthen. The nearest technical supports for the pride are seen at the level of 110.43 and 110.03.