USD/JPY edged lower, tracking lower UST yields while the BoJ MPC (last Friday) signaled continued policy normalization. The currency pair was last seen at 154.05, OCBC FX analysts Frances Cheung and Christopher Wong noted.

"Japanese economic data supports BoJ policy normalization. Wage growth pressures remain intact, along with broadening services inflation. Tokyo core CPI, PPI, wages rose while labor market reports also showed upward wage pressure with the unemployment rate easing, while unions called for another 5-6% wage hike in the shunto wage negotiations for 2025."

"We still expect USD/JPY to trend lower, based on the Fed's rate cut cycle while the BoJ still has room to continue policy normalization. Bearish momentum remains intact while the RSI is down. Consolidation is likely with risks skewed to the downside. Support at 152.80 (200-DMA). Resistance at 156.90 (21-DMA), 158.80 (recent high)." (AL)

Source: FXstreet