• USD/JPY edged higher on Wednesday as yen weakened despite reports that Bank of Japan was preparing for a possible interest rate hike as soon as next month.
• The Japanese yen has faced pressure amid growing concerns over the country’s deteriorating fiscal situation while traders remain alert to the possibility of intervention from Tokyo to curb the currency’s decline.
• On Sunday, Takuji Aida, an adviser to Prime Minister Sanae Takaichi, stated that Tokyo is ready to intervene proactively to counter the adverse economic impact of a weak yen.
• Data released on Wednesday showed that a key indicator of Japan’s services sector prices climbed 2.7% year-on-year in October, highlighting how labor shortages are continuing to push companies to pass on higher costs.
• •Bank of Japan data showed that the rise in the services producer price index, which measures the prices companies charge each other for services, eased to 2.7% in October from a revised 3.1% increase in September.
• Immediate resistance is located at 157.00 (Psychological level), any close above will push the pair towards 157.40 (23.6%fib).
• Support is seen at 155.35 (38.2%fib) and break below could take the pair towards 154.96 (SMA 20)
Recommendation: Good to buy around 156.00, with stop loss of 155.30 and target price of 157.50
