FxWirePro: USD/JPY remains buoyant, looks to extend gains

• USD/JPY remains buoyant and has returned to the 158 handle, trading between 158.07 and 158.40 in Asia so far.

.•JGB-US Treasury two-year yield differentials have eased from recent highs, although the 10-year differential has widened. Changes in these yield spreads remain important for USD/JPY, as they influence the relative attractiveness of dollar and yen assets.

•BOJ Policy Board member Sato has adopted a more hawkish stance, saying he now supports rate hikes. Sato previously dissented at the latest BOJ meeting in favour of keeping rates unchanged, alongside fellow newcomer Asada.

• BOJ policymaker Ayano Sato supports raising interest rates in several stages, Kyodo reported Wednesday, suggesting even dovish board members recognise the need to address inflation risks..

•Sato, appointed by Prime Minister Sanae Takaichi, was one of two dissenters against the BOJ’s September rate increase after joining the nine-member board in June..

•After spending ⁠years treading cautiously in policy normalisation, the BOJ picked up pace in raising rates by hiking in June and September as the Iran war-induced energy shock added to price pressures ​from rising import costs via a weak yen

• Immediate resistance is located at 158.52(50%fib), any close above will push the pair towards 159.73(Higher BB).

•  Support is seen at 158.00(Psychological Level) and break below could take the pair towards 156.92(SMA 20)

Recommendation: Good to buy  around 158.30, with stop loss of 157.40and target price of 158.90