USDJPY

The yen has been on the defensive earlier this year as soft Japanese data kept the Bank of Japan on hold and U.S. economic trends have shown some resilience. However, we expect slower U.S. growth, easing by the Federal Reserve, and lower U.S. bond yields, all of which should support Japan’s currency. From a technical perspective, the failure to find acceptance above 149.40 this week has created a bearish double top formation, while some follow-on selling below the 100-day Simple Moving Average (SMA), which is anchored near the 147.60-147.55 region, could drag the USD/JPY pair toward the psychological 147.00 level and a new monthly low touched last week below 146.00. Support: 147.600 Resistance: 150.110