FxWirePro: USD/JPY eases slightly but outlook is bullish

• USD/JPY eased   on Tuesday as market participants continued to monitor the BOJ's stance after its September rate hike and recent signals that further tightening remains possible.

• The BOJ is set to release fresh quarterly economic growth and inflation projections at its October 29-30 policy meeting, with markets looking for clues on when the next rate increase could come. Many analysts anticipate a further hike by year-end.

• Japan’s wholesale prices increased 6.8% year-on-year in September, data released Tuesday showed, easing from the previous month but underscoring mounting inflationary pressures that sustain expectations of a near-term BOJ rate hike.

•  BOJ Governor Kazuo Ueda said the timing and pace of future rate hikes would depend on how far rising wholesale prices feed through to consumer inflation and the resulting impact on consumption.

• The figures will be closely examined by the Bank of Japan board as it prepares fresh quarterly forecasts for growth and inflation at this month’s meeting.

 • Immediate resistance is located at 158.78(50%fib), any close above will push the pair towards 159.51(Higher BB).

•  Support is seen at 157.95(SMA 20) and break below could take the pair towards 156.42(61.8%fib)

Recommendation: Good to buy  around 158.00, with stop loss of 157.40  and target price of 158.70