Forex: USD/JPY takes a breather and consolidates gains

FXstreet.com (Córdoba) - The dollar extended gains into a seventh consecutive day against the yen on Thursday, as the Japanese currency continues to weaken amid expectations the BoJ would ease its policy further to stimulate the economy.

USD/JPY rose to a fresh 7-month high of 82.82, although the slope of the rise has moderated after rallying over 1.0% on Wednesday. At time of writing, USD/JPY is trading at the 82.60 area, 0.1% above its opening price.

According to the Danske Bank analysts, the recent spike in USD/JPY is beginning to look relatively stretched according to technical indicators such as RSI, while USD/JPY positions looks also stretched. "All this could indicate that near-term correction could be imminent in USD/JPY", they say. "However, we still expect USD/JPY to move higher the next couple of weeks ahead of the December election and the 20 December Bank of Japan meeting".

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