Image Source: Pixabay
The Japanese Yen (JPY) struggle to gain any meaningful traction during the Asian session on Tuesday and remains well within striking distance of a multi-month low against its American counterpart. Skepticism over the Bank of Japan’s (BoJ) intentions to hike interest rates further, along with the Federal Reserve’s (Fed) hawkish shift, tempers expectations of a sharp narrowing in the US-Japan rate differential. This, along with a generally positive risk tone, continues to undermine the JPY. Meanwhile, strong inflation data from Japan recently left the door open for a potential BoJ rate hike in January or March. This, along with geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with trade war fears, might hold back bearish traders from placing aggressive bets around the safe-haven JPY. That said, a bullish US Dollar (USD) should to act as a tailwind for the USD/JPY pair amid thin trading volumes on Christmas Eve.
Japanese Yen bears have the upper hand amid BoJ’s dovish outlook
USD/JPY bulls might await move beyond 158.00 before placing fresh bets
From a technical perspective, the multi-month top, around the 158.00 neighborhood touched last Friday, could act as an immediate hurdle. A sustained strength beyond the said handle will be seen as a fresh trigger for bulls and lift the USD/JPY pair to the 158.45 intermediate resistance en route to the 159.00 mark amid positive oscillators on the daily chart. On the flip side, weakness below the 157.00 round figure now seems to find decent support near the 156.65 horizontal zone, below which the USD/JPY pair could slide to the 156.00 mark. Any further decline could be seen as a buying opportunity near the 155.50 region and seems limited near the 155.00 psychological mark. The latter should act as a strong base for spot prices.More By This Author:USD/JPY Retreated To 156.50 After Reaching Multi-Month Highs On Softer US PCE DataUS Dollar Edges Lower After Soft PCE Data USD/CAD Fails At 1.4435 And Pulls Back Below 1.4400 Weighed By A Softer US Dollar