No significant events are expected today.

Fading hopes for a Bank of Japan rate hike in December are forcing yen bulls to retreat. The elevated yield on U.S. Treasury bonds supports the dollar and pressures the low-yielding yen.

The Japanese yen (JPY) continues to defend against its American counterpart, pushing the USD/JPY pair closer to the 153.00 level or a new monthly peak during the Asian session on Friday. Recent media reports indicate that the Bank of Japan (BoJ) is unlikely to raise interest rates at its upcoming meeting next week, which continues to undermine the yen’s value. Additionally, expectations that the Federal Reserve will maintain a less dovish stance support U.S. Treasury yields and put further pressure on the low-yielding yen.

Meanwhile, the Bank of Japan’s quarterly Tankan survey released today showed a slight improvement in business confidence among large Japanese manufacturers in the fourth quarter of 2024. This aligns well with the central bank’s plans for a gradual rate hike and may prevent yen bears from making aggressive bets. Moreover, ongoing geopolitical risks and concerns over U.S. President-elect Donald Trump’s tariff plans should help limit losses for the safe-haven yen ahead of next week’s key central bank events — the Fed and BoJ meetings.

Recommendation: Monitor the 153.00 level; trading is predominantly in Buy orders.