FxWirePro: USD/JPY retreats as Japan signals possible FX intervention

• USD/JPY eased from a one-month high on Monday after Japan’s top currency diplomat signaled the possibility of intervention, prompting traders to pare back long dollar positions amid renewed caution.

 • Japan’s top currency diplomat Atsushi Mimura said on Monday authorities would take “appropriate” action against excessive FX moves, warning intervention remains possible after last week’s central bank meeting triggered renewed yen weakness.

• The remarks echoed the finance minister’s warning that Japan would act against excessive, speculative yen moves amid concern over rising import and living costs.

• The BOJ raised rates to 0.75% from 0.5% on Friday, the highest in 30 years, narrowing the rate gap with the U.S. Fed.

• Minutes of the BOJ meeting are due on Wednesday, while the head of the central bank speaks to a Japanese business lobby on Christmas Day.

• Immediate resistance is located at 157.88(23.6%fib), any close above will push the pair towards 158.18(Higher BB).

•  Support is seen at 155.72 (38.2%fib) and break below could take the pair towards 155.00(Lower BB)

Recommendation: Good to sell around 157.30 with stop loss of 157.90 and target price of 156.30