FxWirePro: USD/JPY dips as Yen firms on BOJ rate expectation

• USD/JPY dipped on Monday as expectations for a September BoJ rate hike strengthened, supporting the yen, while renewed concerns over possible official intervention also encouraged yen buying.

• Bank of Japan Governor Kazuo Ueda last week said policymakers would consider a rate hike as early as September, with inflation risks a key factor in the decision, signalling a strong possibility of a rate increase this month.

•Markets are pricing in a 75% chance the Bank of Japan will raise rates a quarter point at its meeting on September 18, with a 60% probability of another move by December.

• Japan's foreign reserves posted their biggest-ever drop in August, government data showed on ​Monday, after Tokyo launched another round of record dollar-selling, ‌yen-buying intervention to stem persistent weakness in its currency.

The reserves stood at $1.208 trillion at the end of August, down by a record $79.6 billion, or 6.18%, ​from $1.287 trillion a month earlier, according to the Ministry ​of Finance (MOF) data.

• Immediate resistance is located at 156.31 (Daily high), any close above will push the pair towards 157.70(38.2%fib).

•  Support is seen at 155.23(23.6%fib) and break below could take the pair towards 155.00(Psychological level)

Recommendation: Good to sell  around 155.50, with stop loss of 156.50 and target price of 154.50