USD/JPY traded subdued at 155.70 as markets await the December BoJ rate hike, with momentum mildly bearish and RSI slipping, OCBC's FX analysts Frances Cheung and Christopher Wong note.

JPY recovery hinges on BoJ guidance, soft USD

"USD/JPY traded subdued as markets await catalyst. Markets have already priced 81% probability of December hike and the key question is likely what comes next - question if this is a one hike and another long wait. 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 a softer USD, US rates environment."

"Pair was last seen at 155.70 levels. Daily momentum is mild bearish while RSI slipped. Risks modestly skewed to the downside. Key support at 155.40 levels (21 DMA). Decisive break puts next support at 154.40 (76.4% fibo) and 151.60 (61.8% fibo retracement of 2025 high to low, 50 DMA). Resistance at 156.70, 157.90 and 158.87 (previous high in 2025)."