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The Japanese Yen (JPY) trims a part of Asian session gains against its American counterpart as bulls seem reluctant on the back of the uncertainty over the timing of another interest rate hike by the Bank of Japan (BoJ). Adding to this, expectations that US President-elect Donald Trump’s touted policies will be inflationary and limit the scope for further easing by the Federal Reserve (Fed) remain supportive of elevated US Treasury bond yields. This, along with a positive risk tone, contributes to capping the lower-yielding JPY.That said, the potential for any meaningful JPY depreciation seems limited amid speculations that Japanese authorities might intervene in the FX market to prop up the domestic currency. Apart from this, geopolitical risks might continue to offer some support to the JPY, which, along with subdued US Dollar (USD) price action, should act as a headwind for the USD/JPY pair. Traders now look to the US housing market data for some impetus, though the mixed fundamental backdrop warrants caution before placing directional bets.
Japanese Yen struggles to capitalize on intraday gains amid BoJ rate-hike uncertainty
USD/JPY continues to show some resilience below 154.00 mark; bullish bias remains
From a technical perspective, the USD/JPY pair’s failure to find acceptance above the 155.00 psychological mark on Monday and the subsequent pullback warrants caution for bullish traders. Spot prices, however, might continue to find support near the 153.85 region on the back of positive oscillators on the daily chart. Some follow-through selling should pave the way for additional losses towards the 153.25 region en route to the 153.00 mark and the next relevant support near the 152.70-152.65 area. A convincing break below the latter might expose the very important 200-day Simple Moving Average (SMA) resistance breakpoint, now turned support, currently pegged near the 151.90-151.85 region.On the flip side, the 155.00 mark, followed by the overnight swing high, around the 155.35 region. A sustained strength beyond the latter will reaffirm the near-term positive outlook, which should allow the USD/JPY pair to surpass the 155.70 intermediate hurdle and aim towards reclaiming the 156.00 round figure. The momentum could extend further towards retesting the multi-month top, around the 156.75 region touched last Friday.More By This Author:
