The opening of the USDJPY currency pair at 146.866 is accompanied by a downward gap in response to the hawkish indication from BoJ Governor Ueda.

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• USD/JPY opens with a bearish gap in reaction to BoJ Governor Ueda’s hawkish signal.

The pair currently trades last at 146.866.

The previous day high was 147.87 while the previous day low was 146.59. The daily 38.2% Fib levels comes at 147.38, expected to provide resistance. Similarly, the daily 61.8% fib level is at 147.08, expected to provide resistance.

The USD/JPY pair opened with a big 85 pips bearish gap on the first day of a new week and remains depressed below the 147.00 mark through the first half of the Asian session. Spot prices, however, manage to defend the 200-hour Simple Moving Average (SMA) support, currently pegged around the 146.65 region, which should now act as a pivotal point for intraday traders.

The Japanese Yen (JPY) strengthens in reaction to the Bank of Japan (BoJ) Governor Kazuo Ueda’s hawkish remarks over the weekend, signalling possible interest rate hikes, which, in turn, weighs on the USD/JPY pair. Ueda said the central bank could end its negative interest rate policy when achievement of the 2% inflation target is in sight, the Yomiuri newspaper reported Saturday. Ueda, however, reiterated that the BoJ will patiently maintain the ultraloose policy until it is convinced inflation will sustainably stay around 2%, backed by solid demand and wage growth.

In contrast, the Federal Reserve (Fed) is expected to deliver one more 25 bps rate hike by the end of this year and keep interest rates higher for longer. The bets were reaffirmed by The Wall Street Journal report that some officials still prefer to err on the side of raising rates too much, reasoning that they can cut them later. The outlook, meanwhile, remains supportive of elevated US Treasury bond yields, which helps limit a modest US Dollar (USD) pullback from its highest level since March 8 touched last week and acts as a tailwind for the USD/JPY pair, at least for now.

In the absence of any relevant market-moving economic releases on Monday, the aforementioned fundamental backdrop makes it prudent to wait for strong follow-through selling before confirming that spot prices have topped out in the near term. Traders might also prefer to wait on the sidelines ahead of this week’s important US macro releases – the latest consumer inflation figures on Wednesday, followed by the Producer Price Index (PPI) and Retail Sales data on Thursday.

Technical Levels: Supports and Resistances

USDJPY currently trading at 146.94 at the time of writing. Pair opened at 147.84 and is trading with a change of -0.61 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 146.27, 50 SMA 143.55, 100 SMA @ 141.17 and 200 SMA @ 137.09.

The previous day high was 147.87 while the previous day low was 146.59. The daily 38.2% Fib levels comes at 147.38, expected to provide resistance. Similarly, the daily 61.8% fib level is at 147.08, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 146.99, 146.15, 145.71
• Pivot resistance is noted at 148.28, 148.72, 149.56

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