FxWirePro: USD/JPY early strength fades, focus shifts to US data

 •  USD/JPY retreated on Monday  as markets increasingly priced in further interest rate hikes by the Bank of Japan this year..

• The yen remains underpinned by talk of potential official action to slow its decline and prospects for additional policy tightening by the BoJ..

 •  BoJ Governor Kazuo Ueda reiterated on Monday that policy rates will be guided by how the economy and inflation evolve relative to the bank’s forecasts

  • The remarks reflected rising optimism that Japan is finally leaving behind years of deflation and transitioning to a more sustainable growth environment.

• Attention is now turning to Friday’s U.S. employment report, which is seen as a key driver for Federal Reserve rate expectations and could determine the next directional move..
 
• Immediate resistance is located at 157.28(Jan 5th high), any close above will push the pair towards 157.82 (23.6%fib).

•  Support is seen at 156.15(SMA 20) and break below could take the pair towards 155.51 (38.2%fib)

Recommendation: Good to buy around 156.20, with stop loss of 155.50 and target price of 157.50