- Japanese Yen falls after dovish comments from BoJ officials.
- Fading hopes for Fed rate cuts offer support to the USD.
- USD/JPY is likely to encounter resistance around the 146.85 area.
The US dollar (USD) is extending its rally as comments from Bank of Japan officials have poured cold water on investor expectations that the central bank could end its ultra-loose policy after its meeting. from December.
Dovish comments from BoJ officials weigh on the Yen
News quotes Bank of Japan officials suggest that there is no need to end the negative rate policy as there is insufficient evidence that wage growth supports sustainable inflation.
This has given an additional boost to USD/JPY, already recovering after Friday’s US non-farm payrolls report.
The US economy created more jobs than expected in November, unemployment fell and wage inflation accelerated. Evidence of a resilient US labor market crushed market expectations of Fed rate cuts in early 2024 and sent US yields and the US dollar higher.
USD/JPY approaches key resistance zone at 146.85
The pair is testing a previous support level in the 146.30 area. Above that level, the 50% retracement of the pair’s decline from the mid-November high meets trendline resistance at 146.85. The pair is likely to encounter strong resistance at that level.
Supports are located at 145.30 and 143.75.
USD/JPY technical levels to watch
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
