• USD/JPY firmed on Tuesday as yen dipped as investors reassessed Japan’s fiscal health and pushed back bets on a Bank of Japan rate increase .
• Investors remain uneasy about Japan’s fiscal outlook as expectations grow that Prime Minister Sanae Takaichi will unveil additional stimulus measures to support the economy.
• The yen saw sharp spikes on three occasions in January, with the biggest moves coming after reports of an unusual rate check by the Federal Reserve Bank of New York, as the currency weakened toward the psychologically significant 160 level.
• The yen surged over 1% to a three-month high of 152.10 per dollar after the rate checks often seen as a precursor to official intervention. It stood around 154.60 in Asia on Tuesday.
• Immediate resistance is located at 156.22 (38.2%fib), any close above will push the pair towards 157.54(Higher BB).
• Support is seen at 154.68 (SMA 20) and break below could take the pair towards 153.76(50%fib)
Recommendation: Good to buy around 155.20, with stop loss of 154.50 and target price of 155.90
