USD/JPY experienced volatile trading over the past 24 hours, currently sitting at 153.61, according to OCBC’s FX analysts Frances Cheung and Christopher Wong. The pair’s movement reflects market uncertainty amid Japan’s monetary policy outlook.
Earlier, markets had hoped for clearer guidance from Bank of Japan (BoJ) Governor Haruhiko Ueda on potential policy changes at the upcoming December Monetary Policy Committee (MPC) meeting. However, Governor Ueda dashed these expectations by emphasizing that decisions would remain data-dependent, taking into account economic activity, price trends, and financial conditions. This approach suggests that any policy adjustments will be contingent on future developments rather than preset actions.
Ueda also pointed to the ongoing “shunto” wage negotiations as a key area of focus, with market participants awaiting updates on wage increases. However, substantial progress or confirmation of wage changes may not occur until March or April next year.
From a technical perspective, USD/JPY’s bullish momentum has faded, with the Relative Strength Index (RSI) showing signs of potential bearish divergence. The pair is likely to face further downside pressure, with immediate support at 153.30, which coincides with the 21-day moving average and a 61.8% Fibonacci retracement from July’s high to September’s low. A break below this level could lead to a further decline towards the 150.70 mark, which represents the 50% Fibonacci retracement. On the upside, resistance is noted at 156.50, the 76.4% Fibonacci retracement level.
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