• USD/JPY dipped on Wednesday after upbeat data on wages supported expectations of further tightening by the Bank of Japan this year.
• Data that showed Japan's December inflation-adjusted real wages rose 0.6% year-on-year thanks to a wintertime bonus bump, with government officials expressing optimism that wage hike momentum is growing.
•In separate 2024 wage data, base salary grew at the fastest pace in three decades, while special payments rose at the fastest rate since 2001, according to the ministry.
• Traders raised expectations for BOJ rate hikes this year, pricing in more than 30 basis points by year-end.
• Technical signals are bearish as RSI is at 39, daily momentum studies 11,14 and 21 DMAs are trending down.
• Immediate resistance is located at 154.61 (Daily high), any close above will push the pair towards 155.56 (38.2%fib).
• Support is seen at 153.15 (50%fib) and break below could take the pair towards 152.68 (Lower BB)
Recommendation: Good to sell around 154.50, with stop loss of 155.20 and target price of 153.30
