The central bank's Qualitative and Quantitative Easing (QQE) program was left as is on Tuesday, with Bank of Japan (BoJ) Governor Haruhiko Kuroda continuing to reassure the public that inflation is on its way and that the economy is continuing to recover.



However, the bank's reassurances may be waring thin on the public, after recent data showed national core inflation eased to nothing in July and that the economy contracted 0.3% in the June quarter.



Zero inflation makes it hard for the BoJ to be credible, particularly after more than two years of QQE, which currently sees ¥80 trillion injected into the monetary system each year. Low global oil prices partly explain why inflation in Japan is so weak, however, even when excluding fuel prices, the CPI only rose 0.6% year-on-year in July, some way off the BoJ's 2% target.



On Tuesday the BOJ admitted that exports and production had softened, saying that both were being affected by the slowdown in emerging economies. This change in tone could be the bank paving the way for further easing.



USDJPY is supported above 120.00 levels and currently trading at 120.09. It made intraday high at 120.65 and low at 119.90 levels.