USD/JPY Strategy: Yen Hits 5-Month Low, Central Bank Policy Still Uncertain

Fundamental Analysis:

Last Friday's Bank of Japan (BOJ) meeting minutes revealed that some policymakers hold a positive outlook on the prospect of raising interest rates. Additionally, the BOJ has reduced the scale of U.S. bond purchases. However, the yen remains influenced by the current policy environment. BOJ Governor Kazuo Ueda stated that the central bank is examining more data regarding wage growth and other trends, indicating that the January rate hike expectation remains uncertain. This makes it difficult for yen bulls to gain strong support, potentially relying on official interventions against yen depreciation to stabilize the exchange rate.

Technical Analysis:

The 15-minute chart for USD/JPY shows the price in an upward channel, with potential corrections to demand zones where momentum could rebuild. Long positions can be considered within the demand zone, with a stop loss set below the lower boundary of the channel and a target at the channel top or current swing high.

Recommendation:

Entry: Buy at 157.629 or better.

Stop Loss: Below 157.347. Target: 157.910.

Support: 157.347 Resistance: 157.984

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