• USD/JPY gained modestly on Monday as yen remained defensive at the start of a new week as investors were wary of mixed signals from the Bank of Japan.
• Investors remain uncertain about the timing of the Bank of Japan’s next rate hike as political and fiscal dynamics add to policy ambiguity.
• Speculation is growing that newly appointed Prime Minister Sanae Takaichi will prioritize large-scale fiscal stimulus to support growth and cushion households from rising living costs.
• Bank of Japan Governor Kazuo Ueda last week delivered the clearest signal yet that a rate hike could come as soon as December. However, markets remained unimpressed by the central bank’s cautious pace, especially as the Federal Reserve has adopted a more hawkish stance.
• Meanwhile, investors are closely watching upcoming U.S. data releases, including the ADP employment report and ISM purchasing managers’ indexes, for fresh insights into labor market and business activity trends..
• Immediate resistance is located at 154.43 (23.6%fib), any close above will push the pair towards 155.00 (Psychological level).
• Support is seen at 152.92 (38.2%fib) and break below could take the pair towards 152.21(SMA 20).
Recommendation: Good to buy around 154.00, with stop loss of 153.60 and target price of 154.60
