• USD/JPY dipped on Monday as the yen strengthened amid growing expectations of further central bank rate hikes.
• Markets have priced in a near certainty that the Bank of Japan will raise rates at its meeting next month.
• BOJ Governor Ueda said last month that the central bank would focus on rising inflation risks and could accelerate the pace of rate hikes if financial conditions remained too loose...
• The yen’s weakness is creating challenges for Japanese policymakers by raising import prices and adding to inflationary pressures. The currency has been weighed down in part by the BOJ’s gradual rate-hike cycle, which has maintained a wide rate differential with the U.S.
• Immediate resistance is located at 160.23 (50%fib), any close above will push the pair towards 160.76(Higher BB).
• Support is seen at 159.09(SMA 20) and break below could take the pair towards 158.56(38.2%fib
Recommendation: Good to sell around 159.70, with stop loss of 160.50 and target price of 159.30
