USD/JPY: BoJ is coming up next – OCBC
|Geopolitical escalation in Middle East saw safe haven proxies, including JPY strengthening last Friday. USD/JPY was last at 144.12 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
2-way trades likely in the interim
"USD/JPY touched a low of 142.80 before rebounding. Surge in oil prices saw UST yields rising, leading to USD/JPY’s rebound. BoJ MPC on Tue may complicate JPY’s safe haven story. Governor Ueda’s recent comments that BoJ is still some distance from 2% goal gave the impression that the timing of next hike may be pushed back."
"Although the timing of BoJ policy normalisation may be deferred, policy normalisation is not derailed. Broadening price pressure and wage growth suggest that BoJ’s next course of action remains a hike but in the interim, BoJ may prefer to stay on hold due to uncertainties on outlook and tariff."
"Nevertheless, we remain watchful for any surprise hawkish tone as that may pose downward pressure on the pair. Mild bullish momentum on daily chart intact while RSI rose. 2-way trades likely in the interim. Support at 144 (21, 50 DMAs), 142.50 levels. Resistance at 145.10, 145.50 levels."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.