• USD/JPY extended downside momentum on Wednesday as the yen continued firm amid growing expectations that the Bank of Japan could accelerate the pace of policy tightening.
•The Bank of Japan is widely expected to raise its policy rate by 25 basis points to 1.25% from 1.0% at its September 17–18 meeting.
• The BOJ began its current tightening cycle in 2024 and has since then raised its policy rate by 25-bp increments at a pace of roughly twice a year.
•In the past, BOJ officials stressed the need to move cautiously to avoid cooling sentiment in an economy that had been mired in deflation for nearly three decades.
•In recent months, however, more acute price pressures arising from sharp yen declines have created a greater sense of urgency in Japan.
• Immediate resistance is located at 154.11 (Daily high), any close above will push the pair towards 155.19(38.2%fib).
• Support is seen at 152.95(Dailylow) and break below could take the pair towards 152.00(Psychological level)
Recommendation: Good to sell around 153.40, with stop loss of 154.50 and target price of 152.50
