USDJPY Still Awaits the Next CatalystU.S. Dollar / Japanese YenFOREXCOM:USDJPYNouzTraderThe Japanese Yen (JPY) struggled to attract buyers and languished near a nine-month low against the US Dollar (USD). Despite some downside risks (from Japanese intervention), the JPY remained weak due to dovish signals from the Japanese government. -------------------------------------------------------------------------------- ## JPY Weakening (Driving USD/JPY Up) - PM Takaichi's Signal: Prime Minister Sanae Takaichi expressed the government's preference for keeping interest rates low and called for close coordination with the Bank of Japan (BoJ). - Impact: These comments cooled market expectations for an upcoming BoJ interest rate hike, a key factor behind the JPY's underperformance. ## Limits to USD/JPY Upside - BoJ Hike Expectations: Despite the weakening, traders still see a 24% chance of a BoJ rate hike in December and a 46% chance in January. - Intervention Warning: The recent decline in the JPY prompted Japan's Finance Minister and Economy Minister to issue warnings about currency movements, fueling concerns about intervention. - USD Weakens: The US dollar (USD) is languishing near a two-week low amid economic concerns (post-shutdown), which could help limit USD/JPY gains. - Risk-off sentiment: A surge in risk-off sentiment could support the JPY as a safe-haven currency. -------------------------------------------------------------------------------- ## Bullish Scenario - Upside Trigger: This week's breakout through the 154.45-154.50 horizontal resistance is seen as a key trigger. - Next Target: Spot prices may rise to the 155.60-155.65 intermediate resistance and eventually aim to reclaim the 156.00 round number. - Warning: Repeated failures above the psychological 155.00 level warrant caution before taking aggressive bullish positions. ## Bearish Scenario - Buying Opportunity: Any further weakness should be viewed as a buying opportunity and is expected to find support near 154.00. - Pivot Point: A convincing break below $154.00 could drag USD/JPY to the 153.60-153.50 region and the 153.00 round number. The 153.00 level should act as a key pivot point. - Bias Reversal: A break below 153.00 could shift the bias to bearish and open the way to the 152.15-152.10 area.