FxWirePro: USD/JPY dips as yen edges higher as rate hikes and FX intervention risks come into focus

 • USD/JPY dipped on Monday    as investors assessed timing of more interest rate hikes in Japan and the possibility of intervention in thin end-of-year trading.

• Bank of Japan policymakers debated the need to continue raising rates, a summary of opinions at their policy meeting in December showed on Monday.

• The summary of opinions released on Monday showed many board members saw the need for further increases to the rate, which remained significantly negative in inflation-adjusted terms.

• Some board members said Japan’s ultra-low rates are weakening the yen and fueling inflation, signaling FX moves will be key in future rate-hike talks.

•The summary showed rising board confidence that Japan’s economy can absorb higher U.S. tariffs, allowing firms to continue raising wages next year.

•Japan’s finance minister said last week that authorities retain full flexibility to respond to excessive swings in the yen, underscoring Japan’s readiness to act if currency moves become disorderly.

• Immediate resistance is located at 157.00(Psychological level), any close above will push the pair towards 157.68 (23.6%fib).

•  Support is seen at 155.91 (SMA 20) and break below could take the pair towards 155.59 (38.2%fib)

Recommendation: Good to sell  around 156.50 with stop loss of 157.60 and target price of 155.50