USD/JPY Declines on Hawkish BoJ, Intervention Fears

Fundamental Analysis

* Hawkish Note: The Japanese Yen strengthened against the U.S. Dollar following hawkish remarks from Bank of Japan (BoJ) Governor Kazuo Ueda. Supporting the Yen further, comments from Japan’s Finance Minister Katsunobu Kato rekindled concerns about potential government intervention. On Wednesday, Governor Ueda emphasized that the BoJ would consider raising rates and adjusting monetary support if economic and price conditions continue to improve. Meanwhile, Finance Minister Kato expressed concern over foreign exchange movements, particularly those driven by speculators, and reiterated the government’s readiness to take appropriate measures against excessive volatility. On the economic data front, Japan reported a decline in household spending and real wages for the fourth consecutive month in November due to rising prices, leaving room for a potential rate hike by the BoJ in January or March.

Technical Analysis

*Technical Breakout: USDJPY was traded lower while currently testing the support level 155.750. MACD which illustrate strong bearish momentum signal suggest the pair to likely extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 153.650 after it breach below the level 155.750. Conversely, a potential reversal is also to be expected and the price could head back towards 157.350.

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Potential Risks

Looking ahead, Federal Reserve officials Thomas Barkin, Neel Kashkari, and John Williams are scheduled to speak ahead of Thursday’s release of Retail Sales and jobless claims data. Meanwhile, Japan’s economic calendar remains empty for the rest of the week.

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Monitoring

Stay updated on US and Japan data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.