📰 Testing Whether the Yen-Weakness Trend Can Really Hold

— Directionless Trading, But the Bias Remains in Focus —

1️⃣ Market Summary

Because of Christmas holidays, Europe is closed and U.S. trading is extremely thin.
With liquidity low, USD/JPY is drifting, searching for direction around the upper 155 area.

During Tokyo trading, softer Tokyo CPI triggered yen selling and dollar buying, pushing USD/JPY up to around 156.49.
However, with London closed, upside momentum remains limited.

2️⃣ BOJ Outlook: No Yen Strength — Carry Trades Continue

In his latest speech, Governor Ueda reiterated that:

“If economic and price conditions continue to improve, we may continue raising policy rates.”

Markets judged the message as nothing new, and the reaction in FX was limited.

The 2% inflation target is approaching, supported by wage gains
But the timing of the next rate hike remains unclear

➡ As a result, yen carry trades remain intact.

3️⃣ Currency Moves

💵 USD/JPY

Tokyo: climbed to 156.49
Afterwards: oscillating in the upper 155s

➡ Still searching for direction.

Soft inflation data reduced expectations of additional BOJ tightening, making yen selling easier — but thin liquidity is capping upside.

🇪🇺 EUR/JPY

Overseas: centered around the 183 level
Tokyo: pushed up toward 184.43, then stalled

➡ Likely to trade within 183 mid–high range.

🇬🇧 GBP/JPY

Overseas: mostly around 210
Tokyo: rose to 211.42, then lost momentum

➡ Expected to pivot around the 210 handle.

🌍 EUR/USD

Sideways in the upper 1.17s
➡ Direction remains USD-driven.

🇬🇧 GBP/USD

Trading between high 1.34s and low 1.35s
➡ Consolidation near 1.35.

4️⃣ What to Watch Today (Even in Thin Markets)

U.S. MBA Mortgage Applications
U.S. Initial Jobless Claims
U.S. Weekly Crude Inventory
U.S. 7-Year Treasury Auction

With liquidity thin, even small headlines can trigger price swings —
but sustained moves are still unlikely.

5️⃣ Overall Outlook

Christmas trading conditions mean:

“Standing aside is still a valid strategy.”

The tug-of-war continues:

Yen-weakening pressure (carry trades)
vs.
Intervention risk and government rhetoric

➡ Result: choppy and nervous short-term moves.

Base scenario:
USD/JPY continues to search for direction within 155.50–156.50.

📰 Testing Whether the Yen-Weakness Trend Can Really Hold