USD/JPY stabilizes around 149.50, ahead of Japanese CPI

The USD/JPY began the Asian session almost unchanged, exchanging hands at around 149.55 after the pair reached a weekly low of 147.15 on Tuesday, but buyers stepping in lifted the pair toward the current exchange rates.

USD/JPY traders await the release of inflation data in Japan

On Thursday, European and Asian stocks closed mixed, while US markets remained closed due to the Thanksgiving holiday. That kept the USD/JPY pair trading within a 70-pip range, though the resumption of activities in Japan and the United States (US) would boost liquidity ahead of the weekend.

USD/JPY buyers remain hopeful the pair would extend its rally after Japan revealed a negative Gross Domestic Product (GDP) reading in the third quarter. Nevertheless, soft inflation figures released in the United States, spurred speculations the US Federal Reserve (Fed) ended its tightening cycle. Consequently, US bond yields plunged, a headwind for the pair.

Ahead of the week, the Japanese docket will feature inflation data. The Consumer Price Index (CPI) expanded by 3% YoY in September. Core CPI is estimated to jump by 3%, above the previous month’s 2.8% increase. If inflation numbers exceed the prior month’s figures, that could boost the Yen and tumble the USD/JPY below the first support seen at the Kijun-Sen at 149.51. On the other hand, a further upside is expected, with buyers eyeing the 150.00 mark.

USD/JPY Price Analysis: Technical outlook

From a technical perspective, the USD/JPY remains neutral to upward biased, on the upside capped by the confluence of the Tenkan and Kijun-Sen at around 149.47/53. A breach of the latter will expose the 150.00 figure, followed by the November 13 high at 151.91. On the flip side, if USD/JPY drops inside the Ichimoku Cloud, the first support would be the November 22 low at 148.01, followed by the weekly low at 147.15. Once cleared, the 147.00 figure would be up for grabs.