• USD/JPY recovered from two week low on Friday but gains were limited as diverging BoJ and Fed policy expectations capped further upside.
• Investors remain optimistic that Sanae Takaichi will adopt fiscally responsible policies that could strengthen Japan’s economy.
• This could encourage the Bank of Japan to maintain its policy normalization path, which, together with prevailing risk-off sentiment, supports the safe-haven Japanese yen.
• A stronger yen has dominated the forex market this week, surprising investors who had expected the currency to weaken if Sanae Takaichi secured a strong mandate..
• The yen was on track for its strongest week in nearly 15 months on Friday, rising steadily as Sanae Takaichi's historic election win eased investor concerns over Japan’s fiscal health.
• Immediate resistance is located at 154.00(Psychological level), any close above will push the pair towards 155.17(38.2%fib).
• Support is seen at 152.46(50%fib) and break below could take the pair towards 151.68(Lower BB)
Recommendation: Good to sell around 153.30, with stop loss of 154. 80 and target price of 152.30
