• USD/JPY struggle for direction on Tuesday as a resurgence of trade-war concerns hit risk sentiment and sparked selling in U.S. assets. .
• Trump’s threats prompted a strong backlash in Europe and have cast doubt on the future of trade agreements reached with the region since then.
• Attention now turns to Davos, where Trump is set to meet global business leaders on Wednesday, with his presence expected to dominate the annual gathering of world elites in Switzerland.
•Meanwhile, investors turned their attention to next month’s election, with Prime Minister Sanae Takaichi seeking voter support for higher spending, tax cuts, and a new security strategy aimed at speeding up the defence build-up.
• The Bank of Japan meets on Friday and, although a rate hike is unlikely this time, officials may signal the possibility of tightening as early as April..
• Immediate resistance is located at 159.26(23.6%fib), any close above will push the pair towards 160.00 (Psychological level).
• Support is seen at 157.27(SMA 20) and break below could take the pair towards 156.98 (38.2%fib)
Recommendation: Good to buy around 157.60, with stop loss of 156.50 and target price of 158.70
