USD/JPY trades offered but lacks follow-through, as markets near full pricing of a 25bps BOJ hike on 19 December. Near-term support lies at 155.10–153.90, while any meaningful JPY recovery would require stronger guidance from the BOJ, fiscal prudence, and a softer USD. Pair was last seen around 155.98 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD/JPY is likely to consolidate in the interim

"USD/JPY continued to trade with an offered tone but seems to lack follow-through to test much lower. To be fair, markets have already come close to fully pricing in a BOJ hike on 19 Dec MPC."

"Mild bearish momentum on daily chart intact while decline in RSI moderated. We may see some consolidation in the interim. Support at 155.10, 154.40 (76.4% fibo retracement of 2025 high to low), 153.90 (50 DMA). Resistance at 156(21 DMA), 157 and 158.87 (previous high in 2025)."

"We believe USD/JPY is going into BOJ meeting looking for clues about 2026 not just about Dec meeting outcome. And we reiterate that any meaningful recovery in JPY would require not just the BOJ to follow through with stronger guidance but also for policymakers to demonstrate fiscal prudence and for the USD to stay soft."