USD/JPY consolidated this week, in absence of fresh catalyst as markets await US CPI next Tuesday. Pair was last at 14784 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Political uncertainty can be supportive of the pair

"On tariff development, trade negotiator Akazawa said that US agreed to end the so-called stacking on universal tariffs and reduce tariffs on cars. US will also payback tariffs that were overpaid due to stacking. Daily momentum is mild bearish though decline in RSI moderated. Near term consolidation; but retain bias still to sell rallies."

"Support here at 147.10 levels (38.2% fibo), 145.80/146 levels (50, 100 DMAs). Resistance at 147.90 (21 DMA), 149.40/50 levels (200 DMA, 50% fibo retracement of 2025 high to low). Carry trade allure is somewhat reduced as softer US data builds the case for Fed to resume rate cut cycle soon while BoJ is likely to continue to hike rate in due course."

"To some extent, political uncertainty (referring to PM Ishiba’s political career/ LDP leadership) and credit rating concerns (dependent on fiscal health) can be supportive of the pair, but 'sell USD' momentum and narrowing UST-JGB yield differentials can also counter."