USD/JPY: BoJ MPC is live – OCBC
|![USD/JPY: BoJ MPC is live – OCBC](https://editorial.fxsstatic.com/images/i/USDJPY-neutral-line_Small.png)
USD/JPY fell in reaction to a volley of comments from BoJ officials, that seem to point to high likelihood of a hike at the upcoming MPC (24 Jan). Pair was last seen at 155.82 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.
Wage growth pressure remains intact
“Most notable one was a report that said BoJ officials see good chance of an interest rate hike next week as long as Trump administration does not trigger too many negative surprises. Earlier this week, Governor Ueda spoke about making a decision on whether to raise rate at the upcoming BoJ meeting. He also shared there is positive views on wage hikes gathering momentum.”
“Deputy Governor Himino also said MPC will discuss next week whether to raise rate or not and to raise rate if economic outlook is realized. He also said ‘In conducting monetary policy, it is difficult but essential to judge the right timing’. We still look for a hike as data continues to support policy normalization. Wage growth pressure remains intact, alongside broadening services inflation.”
“Daily momentum is bearish while RSI fell. Risks remain skewed to the downside. Next support at 154.80 (50 DMA), 154.30 (23.6% fibo retracement of Sep low to Jan high) and 152.80 (200 DMA). Resistance at 156.40, 157.40 (21 DMA). Tactically, in our FX Weekly sent yesterday, we look for short SGD/JPY targeting a move lower towards 110. Entered at 115.10 with SL at 117.12. Cross was last at 114 levels.”
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