FxWirePro: USD/JPY hits six-month low below 130 mark, FOMC minutes in focus

Chart - Courtesy Trading View 

USD/JPY was trading 0.53% lower on the day at 129.91 at around 07:40 GMT. The major is extending bearish streak for the 4th straight session, outlook remains bearish.

Looking forward, Wednesday’s FOMC Minutes, as well as Friday’s December month employment numbers for the US, will be crucial for the pair's direction.

FOMC minutes could underscore the divergence between doves and hawks on how high the terminal rate should go, opine Strategists at Citigroup.

Upbeat China Caixin Manufacturing PMI and general US dollar weakness amid recovery in risk sentiment also dents the pair.

Further, Hawkish concerns surrounding the Bank of Japan (BOJ) keep the yen buoyed, dragging the pair lower.

BOJ is considering raising its inflation forecasts in January to show price growth close to its 2% target in fiscal 2023 and 2024, reports from Nikkei Asia showed on Friday.

Strong BOJ inflation forecast, along with the latest tweak in the Yield Curve Control (YCC) policy, and the central bank’s multiple market interventions in the last few days keep bearish bias intact.

Technical bias for the pair is bearish. GMMA indicator shows major and minor trend is bearish. Momentum is with the bears.

Support levels - 129.40 (Lower BB), 128.59 (June 2022 low)

Resistance levels - 131.86 (5-DMA), 134.12 (21-EMA)

Summary: USD/JPY trades with a bearish bias. Scope for pair to test fresh multi-month lows.