USD/JPY: BoJ is likely to proceed with another hike – OCBC
USD/JPY traded firmer, in line with our caution for rebound risks not ruled out in the near term, and the pair was last at 150.15, OCBC’s FX analysts Frances Cheung and Christopher Wong notes.
Bias to sell rallies
“BoJ Nakamura said it is important for BoJ to exercise care when it makes adjustments to policy aimed at rolling back the degree of monetary easing. Probability of BoJ hike in Dec MPC dropped to 36.3% from 57.3% a week ago. We are still looking for BoJ to hike.”
“Price-related data, labour market development, wage growth expectations continue to reinforce the view that BoJ is likely to proceed with another hike, sooner rather than later. Direction of travel for USD/JPY remains skewed towards the downside as Fed cuts and BoJ hikes. The risk is a slowdown in pace of respective policy normalisation.”
“Bearish momentum on daily chart shows signs of fading while RSI shows rose from near oversold conditions. Still see some rebound risks in the near term. Bias to sell rallies. Resistance at 150.70, 151.20 (50 DMA), 152 levels (200 DMA). Support at 149.50, 148.80 levels (100 DMA).”
Author
FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
