USD/JPY rallies above 146.00 as the BoJ cools hopes of an imminent policy shift

Guillermo Alcala FXStreet

The Yen dives as on dovish comments by BoJ officials.
Dwindling hopes of Fed cuts are underpinning support for the USD.
USD/JPY is likely to find resistance at the 146.85 area.

The US Dollar is extending its recovery, as comments from BoJ officials have poured cold water on investors’ expectations that the bank could end its ultra-loose policy after their December meeting.

Dovish comments from BoJ officials hit the Yen

News reports citing Bank of Japan’s officials suggest little need to end the negative rates policy, as there is not enough evidence that wage growth would support sustainable inflation.

This has provided an additional impulse to the pair, already on recovery after Friday’s US Nonfarm Payrolls report.

The US economy created more jobs than expected in November, unemployment receded and wage inflation accelerated. The evidence of a resilient US labour market crushed market expectations of Fed rate cuts in early 2024 and sent US yields and the US Dollar higher.

USD/JPY approaches a key resistance area at 146.75

The pair is now testing a previous support level at the 146.30 area. Beyond here, the 50% retracement of the pair’s decline from mid-November high meets trendline resistance at 146.85. The pair is likely to meet strong resistance at that level.

On the downside, supports are 145.30 and 143.75.

Technical levels to watch

USD/JPY

Overview
Today last price	146.36
Today Daily Change	1.37
Today Daily Change %	0.94
Today daily open	144.99

Trends
Daily SMA20	148.41
Daily SMA50	149.29
Daily SMA100	147.48
Daily SMA200	142.34

Levels
Previous Daily High	145.23
Previous Daily Low	142.5
Previous Weekly High	147.5
Previous Weekly Low	141.64
Previous Monthly High	151.91
Previous Monthly Low	146.67
Daily Fibonacci 38.2%	144.18
Daily Fibonacci 61.8%	143.54
Daily Pivot Point S1	143.25
Daily Pivot Point S2	141.51
Daily Pivot Point S3	140.52
Daily Pivot Point R1	145.98
Daily Pivot Point R2	146.97
Daily Pivot Point R3	148.71

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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