Fundamental view:

The US dollar has rallied a bit against the Japanese yen during the trading course of the week.  US dollar seems to gain support from the US inflation figures and comments from Federal Reserve officials, including Chair Jerome Powell; He says that it is time to act on inflation. The Fed is widely anticipated to increase the amount of its monthly taper from $15 billion to $30 billion at the December 15 conclave. This would bring the end of the $120 billion program forward from June 2022 to April or March, depending on how the fractions are handled. On the other hand, The Bank of Japan is headed in the opposite direction. Prime Minister Fumio Kishida has promised fiscal and monetary programs to revive the Japanese economy. And the BOJ may increase its credit market purchases and the government will put forth yet another supplemental spending budget. This nearly opposite policies from US and Japan may help the USD/JPY to rise further.

Nonfarm Productivity quarterly report on 7^th December and BoJ L Money Stock yearly report on 9^th December created bearish trend whereas Japan GDP quarterly report on 8^th December and Initial Jobless Claims on 9^th December created bullish trend for the pair in this week.

The major economic events deciding the movement of the pair in the next week are Japan Industrial Production monthly report at Dec 14, US Retail Sales monthly report, Fed Interest Rate Decision at Dec 15, US Initial Jobless Claims, Fed Industrial Production monthly report at Dec 16, BoJ Interest Rate Decision and Fed Governor Waller Speech at Dec 17.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was same as the previous week. Maintaining high at 113.95 and low at 112.80 showed a movement of 115 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 113.97 may open a clean path towards 114.53 and may take a way up to 115.12. Should 112.82 prove to be unreliable support, the USDJPY may sink downwards 112.23 and 111.67 respectively. In H4 chart, Formation of bullish shark pattern indicates reversal of the trend creating prospects of a bullish trend Along with that, bullish harami formation braces our expectation.