USD/JPY: Chance of a rate hike at the next MPC - OCBC

USD/JPY continued to hover near recent highs. BOJ Governor Ueda reiterated that BOJ will raise policy rate if economic conditions continue to improve this year. Pair was last seen trading at 157.63, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD/JPY may face intermittent upward pressure

"He added that timing of rate adjustments will depend on the economy, inflation and financial conditions. He also highlighted that the momentum for wage hike is a key point when considering rate hikes. He has been putting a lot of focus on wages but avoided to hint at timing and pace of rate cut."

"Chance of hike at the next MPC (24 Jan) is probably still live. But for now, the reluctance of BOJ and the guidance for Fed pause suggests that USD/JPY may continue to face intermittent upward pressure."

"Bullish momentum on daily chart has faded but dip in RSI also moderated. Pair may consolidation for now until a new catalyst (or hint) comes along. Resistance at 158, 158.90 levels. Support at 156.67 (76.4% fibo retracement of Jul high to Sep low), 155.70 (21 DMA)."