FxWirePro: USD/JPY dips as yen firms ahead of expected BoJ rate hike

• USD/JPY dipped on Thursday as a more hawkish repricing of the BoJ’s rate-hike path supported the yen.

• The BoJ is expected to lift rates to their highest level in 31 years on Friday and indicate a willingness to continue raising borrowing costs amid persistent oil-driven inflation pressures..

• The expected BoJ hike would follow the ECB’s and Fed move  , underscoring the focus on containing inflation.

• Markets have nearly fully priced a BoJ hike and are now looking to Governor Kazuo Ueda for clues on the timing and pace of additional tightening.

•Ueda faces a major communication challenge at Friday’s post-meeting briefing. While the BoJ wants to avoid committing to another early hike, reiterating its data-dependent stance could trigger renewed yen selling and lift import costs.

• Immediate resistance is located at 156.93(SMA20), any close above will push the pair towards 157.61(50%fib).

•  Support is seen at 155.15(38.2%fib) and break below could take the pair towards 154.24(Sep 15h low)

Recommendation: Good to sell   around 157.00, with stop loss of 157.50 and target price of 156.30