On Thursday, global equity markets closed with mixed results in Europe and Asia, while US markets remained shuttered for the Thanksgiving holiday. This led to the USD/JPY pair trading within a 70-pip range, with anticipation building for increased liquidity as activities resumed in Japan and the US ahead of the weekend. Despite Japan reporting a negative GDP reading for Q3, buyers of USD/JPY remained optimistic about a potential extension of the pair’s rally. However, soft US inflation figures fueled speculation that the US Federal Reserve had concluded its tightening cycle, resulting in a decline in US bond yields, acting as a headwind for the pair.

Looking ahead, the Japanese economic calendar will feature inflation data. The Consumer Price Index (CPI) expanded by 3% YoY in September, and the Core CPI is projected to increase by 3%, surpassing the previous month’s 2.8% rise. Stronger-than-expected inflation figures could boost the Yen, potentially causing USD/JPY to fall below the initial support at the Kijun-Sen at 149.51. Conversely, further upside movement is anticipated, with buyers targeting the 150.00 mark.

From a technical standpoint, USD/JPY maintains a neutral to upward bias, facing resistance from the confluence of the Tenkan and Kijun-Sen around 149.47/53. A breach of this level could expose the 150.00 figure, followed by the November 13 high at 151.91. On the downside, if USD/JPY drops within the Ichimoku Cloud, the initial support would be the November 22 low at 148.01, followed by the weekly low at 147.15. A clearance of these levels might open the door to the 147.00 figure.