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The US Dollar is extending its recovery, as comments from BoJ officials have poured cold water on investors’ expectations that the bank could end its ultra-loose policy after their December meeting.
Dovish comments from BoJ officials hit the YenNews reports citing Bank of Japan’s officials suggest little need to end the negative rates policy, as there is not enough evidence that wage growth would support sustainable inflation.This has provided an additional impulse to the pair, already on recovery after Friday’s US Nonfarm Payrolls report. The US economy created more jobs than expected in November, unemployment receded and wage inflation accelerated. The evidence of a resilient US labor market crushed market expectations of Fed rate cuts in early 2024 and sent US yields and the US Dollar higher.
USD/JPY approaches a key resistance area at 146.75The pair is now testing a previous support level at the 146.30 area. Beyond here, the 50% retracement of the pair’s decline from mid-November high meets trendline resistance at 146.85. The pair is likely to meet strong resistance at that level.On the downside, supports are 145.30 and 143.75.
Technical levels to watchUSD/JPY
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