Nov 26 (Reuters) - Recent USD/JPY price action shows this market remains quite resilient and could be set for bigger gains in the days and weeks ahead.
While Japan's steady service inflation keeps alive Bank of Japan rate-hike prospects, the gap in rates between the BOJ and Federal Reserve is expected to remain wide. That large gap in the two central bank rates should keep USD/JPY's underlying bias on the upside.
There is scope for USD/JPY to eventually probe the Nov. 15 156.76 high, a break above which would unmask the July 23 157.09 high. The long tail that formed on the Nov. 19 candlestick line points to a rejection of the downside and seems to have helped USD/JPY form a base last week.
If spot breaks and performs a daily close under the Nov. 19 153.28 low, that would signal a likely shift in the overall bias back to the downside.
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(Martin Miller is a Reuters market analyst. The views expressed are his own)
((martin.miller@thomsonreuters.com))
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