USD/JPY: Off highs, BOJ's Kuroda calls for structural reforms

• USD/JPY is feeling the pull of gravity, possibly due to the losses in the S&P 500 futures. 
• A deeper pullback could be seen due to the Sino-US political tensions. 

USD/JPY is currently trading at session lows near 109.46, having hit a high of 109.60 three hours ago. 

The pair is pulling back, possibly tracking the slow descent of the S&P 50 futures. The index futures were down 0.10% in early Asia and are currently reporting a 0.26% drop. 

Bank of Japan's (BOJ) Governor Kuroda was out on the wires a few minutes before press time calling for structural reforms. Kuroda told Parliament that structural reforms must accompany fiscal and monetary stimulus measures to heighten the economy’s long-term growth potential and added that the central bank's ultra-loose policy is aimed at boosting inflation to 2% and not monetize debt. 

Kuroda's comments are not surprising as the central bank has little room to stimulate, having run an expansionary monetary policy for more than six years. 

Looking forward, the Yen may continue to gain ground, as equities will likely trade risk-averse in response to the decision by President Trump to sign the Hong Kong Democracy Bill. 

The case for deeper pullback looks stronger if we take into account the bearish divergence of the relative strength index on the intraday charts. 

Technical levels