USD/JPY took a flip larger as Tokyo core CPI shocked to the draw back (2.9% vs 3% exp), additional pushing again expectations of BoJ coverage normalisation – by way of the timing of the subsequent fee hike. Pair was final at 147.87 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong be aware.
Slight upside dangers forward
“Day by day momentum is flat whereas RSI rose. Slight upside dangers forward. Resistance at 147.90, 149.40/70 ranges (200 DMA, 50% fibo retracement of 2025 excessive to low). Help at 146.40 (21 DMA), 145.20 (50 DMA).”
“Whereas political uncertainty (referring to PM Ishiba’s political profession), ranking considerations (depending on fiscal well being) and carry play is supportive of USDJPY, ‘promote USD’ commerce can overwhelm. We acknowledged {that a} carry commerce could also be interesting but additionally warned that the enchantment can erode if USD sell-off returns in a giant manner.”
