• USD/JPY edged higher on Thursday as worries of intervention by Tokyo authorities eased slightly.
• Kazuo Ueda said on Thursday that uncertainty surrounds how far interest rates can be lifted, as the central bank struggles to pinpoint Japan’s neutral rate.
• Central banks rely on the neutral rate as a reference point for policy, but because it is not directly observable and shifts with structural factors such as productivity, estimating it remains challenging.
•Japan’s nominal neutral interest rate is estimated by the BOJ to sit within a broad 1% to 2.5% band.
• On Monday, Kazuo Ueda said the Bank of Japan would weigh the “pros and cons” of a rate hike at its next policy meeting, signaling a strong likelihood of a move to 0.75% later this month.
• Immediate resistance is located at 156.18(Dec 2nd high), any close above will push the pair towards 157.54(23.6%fib).
• Support is seen at 155.53 (38.2%fib) and break below could take the pair towards 153.32 (50%fib)
Recommendation: Good to sell around 155.40 with stop loss of 156.50 and target price of 154.50


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