USD/JPY well–supported on dips ahead of the Fed - Scotiabank

Analysts at Scotiabank, note that even though USD/JPY advance has slowed ahead of the Fed, it has not stalled with technical perspective still bullish and corrective USD weakness seen limited.

Key Quotes

“USDJPY remains well–supported on dips ahead of the Fed as US yield differential remain wide and USDsupportive versus the JPY. Japan releases the key Bank of Japan ‘tankan” survey tonight. The Q4 report is expected to show an improvement in the business sentiment diffusion index to 10 (from 6 in Q3)—back to near levels prevailing at the end of last year (12).”

“USDJPY short-term technicals: bullish—USDJPY’s advance has slowed but not stalled. Short-term price action is modestly negative after the USD formed a small “shooting star” top around 116.05 yesterday. The market’s steep advance from early November is overdue a correction but we expect corrective USD weakness to remain relatively limited (112.50/113.50) for the moment.”