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USD/JPY steady in contained range so far today

On Friday the USD/JPY managed to rebound from lows underneath 142.00. The low set was at 141.87, as covered in updates here at the time. The USD/JPY later pushed higher, to set a US close at 142.35. It has not strayed too far from that closing level so far today. Trading in Asia has been light, with a range seen so far covered by 142.10 to 142.40. The prospect of a shift in Japanese monetary policy from the BOJ next year is still hanging over the dollar. The US currency is still on the back foot anyway, because of the shift in rhetoric from the Fed boss the other week. That has also forced a narrowing in the gap between US and Japanese yields and the threat of the BOJ further contracting that is behind the most recent relapse in the USD/JPY. The price action since the drop below its 200 day moving average last week (now at 142.87) and subsequent weekly close below that technical level is not supportive of the dollar either. The USD/JPY is currently trading at 142.35
 

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