Trading sideways for now – OCBC

USD/JPY fell after the BoJ governor presented a cabinet committee document that reiterated the BoJ will continue to raise interest rates if the economy and prices perform as the BoJ expects, note OCBC FX strategists Frances Cheung and Christopher Wong.

Lateral trading is likely

“The Fed-BoJ policy change will lead to a narrowing of the UST-JGB yield differential, and this should continue to support the broader USDJPY downtrend Elsewhere, equity selling (withdrawal of risk appetite) was also a factor weighing on the USDJPY.”

“The pair was last seen at 145.20. The bullish momentum on the daily chart is intact, while the RSI decline has moderated. Possible side trading. Resistance at 146.10 (21 DMA), 147.20 (recent high). Support at 144.40, 143.45 (recent low).”