USD/JPY: Likely to consolidate for the time being – OCBC
USD/JPY traded on a softer footing this morning on comments from BoJ’s board member Takata – it is important for BoJ to continue to consider policy adjustments even after last month’s rate hike in order to avoid excessively high expectations that monetary easing might persist. USD/JPY was last at 151.77 levels, OCBC's FX analyst Christopher Wong notes.
Consolidation likely in the interim
"He also touched on the need to avoid letting upside inflation risks be realised. That said, tariff concerns somewhat negated the downside pressure on USD/JPY. Trump’s mention of 25% tariff on auto is likely to impact Japan as US is one of Japan’s largest trading partners."
"Japanese cars are amongst the top 5 most popular in US and the automotive industry is a key component to Japan’s economy. Japanese officials have already sought exemption from the US, but it’s status and how reciprocal tariffs (another concern) may pan out for Japan remains unclear at this point."
"Daily momentum is flat while RSI rose slightly. Consolidation likely in the interim. Support at 151.50 (38.2% fibo retracement of Sep low to Jan high), 150 levels. Resistance at 152.70 (200 DMA), 153.50/85 levels (21, 100 DMAs) and 154.30 levels."
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FXStreet Insights Team
FXStreet
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