New BoJ leadership will shape market expectations on what policy stance BoJ could adopt going forward. Economists at OCBC analyze how each contender could impact the USD/JPY pair.

Upside momentum likely to have slowed

“Daily momentum is bullish but rise in RSI moderated. Upside momentum is likely to have slowed.”

“Resistance at 133.20 (23.6% fibo retracement of October high to January low) should provide decent resistance before 134.50 levels.”

“Support at 131 (before the gap up) and 130 (21 DMA), 127.50 levels (double-bottom low).”

“Focus this week on the list of BoJ nominees that is likely to be presented to parliament on 10 February though there are reports suggesting a delay to next week. Amamiya’s appointment would be most supportive of USD/JPY upside while Yamaguchi’s appointment could weigh on USD/JPY. Ito and Nakao could see gradual policy normalisation and could also weigh on USD/JPY, but to a lesser extent.”