The USD/JPY pair experienced a pullback during Thursday’s Asian trading session as market participants weighed the prospects of a hawkish turn in the Bank of Japan‘s (BoJ) policy against the backdrop of uncertainty regarding future Federal Reserve rate hikes. Despite a brief recovery from Tuesday’s monthly lows, the pair failed to rise above the previous night’s high as a result of this speculation.
On Wednesday, the Japanese Yen initially weakened to 149.75 against the US Dollar. However, it managed to regain some ground on Thursday. This recovery came despite strong U.S. employment data and hawkish Federal Reserve minutes, both of which had previously supported the U.S. dollar.
Adding to the complex market sentiment were rising inflation expectations for November, which reached their highest level since April, and a significant drop in US durable goods orders. These factors added uncertainty to the dollar’s trajectory.
In addition, trading volumes were affected by the US Thanksgiving holiday, which typically leads to reduced market activity. Technical analysts have been closely monitoring key Fibonacci retracement levels that may serve as potential support and resistance levels for the USD/JPY exchange rate movements.