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USD/JPY Resilient Below 151.00 as Japanese Yen Bulls Stay Cautious

USD/JPY Holds Firm Below 151.00 Amid Japanese Yen Bull Hesitation

USD/JPY Resilient Below 151.00 as Japanese Yen Bulls Stay Cautious

The Japanese Yen (JPY) remains under pressure during the Asian session on Tuesday, struggling to capitalize on a modest rebound from a one-week low against the US Dollar (USD). Lingering uncertainty about a potential Bank of Japan (BoJ) rate hike in December weighs on the currency. While geopolitical concerns and a softer risk sentiment provide some support for the safe-haven JPY, traders appear hesitant to commit ahead of upcoming key events.

BoJ Policy Uncertainty Undermines Yen Strength

BoJ Governor Kazuo Ueda recently suggested the timing for a rate hike is nearing, supported by Japan’s steady underlying inflation. However, mixed signals have emerged, with some reports hinting the central bank may delay action. Additionally, BoJ board member Toyoaki Nakamura’s cautionary remarks about raising rates add to the prevailing uncertainty, limiting the Yen’s appeal.

US Dollar Gains Limited Amid Fed Rate Cut Expectations

Friday’s robust US Nonfarm Payrolls (NFP) data reaffirmed market expectations for a December rate cut by the Federal Reserve. While US Treasury bond yields staged a modest recovery on Monday, they remain subdued, capping the USD’s upward momentum. Uncertainty around potential inflationary impacts of President-elect Donald Trump’s trade policies and upcoming US Consumer Price Index (CPI) data has prompted traders to adopt a cautious stance.

Geopolitical Tensions Add to Market Jitters

Global concerns surrounding President-elect Trump’s tariff plans and heightened tensions in the Middle East—following Syrian rebels’ takeover forcing President Bashar al-Assad to flee—have amplified market caution. These developments add to the complex interplay influencing the USD/JPY pair.

Technical Outlook: Key Levels to Watch

  • Upside Potential:
    The USD/JPY pair faces significant resistance near the 151.75-152.00 zone, a confluence of the 38.2% Fibonacci retracement level and the 200-day Simple Moving Average (SMA). A sustained break above 152.00 could open the door for further gains toward 152.70-152.75 and the 153.00 psychological mark, with potential to extend to the 153.70 region (61.8% Fibo level).
  • Downside Risks:
    Immediate support is seen at 151.00, with stronger support near 150.60 (23.6% Fibo level). A break below 150.00 could expose the pair to deeper losses, targeting 149.50-149.45, followed by the monthly low around 148.65, coinciding with the 100-day SMA. A decisive drop below this level could trigger a fresh bearish move.

Market Focus

Investors will closely monitor Wednesday’s US CPI release, which is expected to offer fresh insights into the Fed’s policy trajectory. This data, alongside next week’s Federal Open Market Committee (FOMC) and BoJ meetings, will likely shape the near-term outlook for USD/JPY. Until then, the pair may continue consolidating below the critical 151.00 level, awaiting clearer directional cues.