USDJPY Analysis: BOJ is about to raise interest rates, and the yen rose first

Fundamental Analysis of USDJPY USDJPY Key Takeaways 

• Weak sales data in December: The monthly rate of retail sales in the United States unexpectedly fell to 0.4% in December, lower than the expected 0.6%, the lowest since August 2024. The “horror data” unexpectedly fell, and the US dollar index weakened. 
• Federal Reserve member speech: Fed Governor Waller believes that the possibility of a rate cut in March cannot be ruled out; if the data performs well, there may be three to four rate cuts this year; Chicago Fed Chairman Goolsbee pointed out that the CPI data is encouraging and suspicious at the same time, and the impact of both is equal. 
• BOJ is about to raise interest rates: It is reported that the Bank of Japan will hold its first policy meeting of the year next week, just a few days after the inauguration of US President-elect Trump. Current market news revealed that the Bank of Japan believes that there is a high possibility of raising interest rates in January.

Technical Analysis of USDJPY Daily and Hourly Charts

USDJPY Daily Chart Insights 

(USDJPY Daily Price Chart, Source: Ultima Markets MT4) 

• Stochastic oscillator: The indicator issued a short signal after a top divergence pattern appeared in the overbought area, and then fell rapidly. In just two days, the fast line indicator has entered the oversold area first, making it clear that the current short trend is strong, and investors should give priority to shorting opportunities. 
• Support below: After USD/JPY broke through the 157 and 156 integer levels in a row, the horizontal resistance below opened. At the same time, the red 33-day MA was broken yesterday, and the short-term resistance below is preferentially seen near the green 200-day MA. 

USDJPY 1-hour Chart Analysis 

(USDJPY H1 Price Chart, Source: Ultima Markets MT4) 

• Stochastic oscillator: The indicator showed a bottom divergence pattern during yesterday’s Asian session, and continued to fall into the oversold area after rebounding and consolidating. Short-term short-selling forces have the upper hand, and short-selling opportunities should be given priority during today’s Asian session. 
• Upper resistance: Liquidity decreases during the Asian session, and the exchange rate has a probability of rebounding. Look up to the dotted downward trend line, which is also near the lower edge of the rectangular fair value gap. 

H2 : Pivot Indicator Insights for USDJPY 

(USDJPY M30 Price Chart, Source: Ultima Markets APP) 

• According to Pivot Indicator in Ultima Markets APP, the central price of the day is established at 156.15, 
• Bullish Scenario: Bullish sentiment prevails above 156.15, first target 156.70, second target 157.10; 
• Bearish Outlook: In a bearish scenario below 156.15, first target 154.50, second target 154.00. 

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