USD/JPY ended four days of selling yesterday with a doji star and now a retracement is underway. The pair is up 44 pips to 148.83.
It traded as high as 149.34 earlier but has since sagged. The mood in markets is quiet ahead of the US holiday but also moderately negative. US equity futures are down about 0.2% and oil prices off by nearly $1.
Yen crosses are broadly higher today but have only recouped a fraction of their recent losses.
Looking ahead, eyes will be on the Bank of Japan and the possibility for yen-supportive policy changes like ending yield-curve control or beginning a cycle of rate hikes. Officials have signaled a plan to patiently lift rates starting in the spring but it will depend on how economic data evolves. For now, they also have some respite on the currency side with the US dollar softening on expectations of a dovish Fed turn. That, however, could swing with upcoming US economic data, including today's weekly jobless claims report.
