USD/JPY picks up on higher US yields, 148.70 is a key resistance

• The US Dollar trims losses and approaches resistance at 148.70.
• Higher US yields are supportring the USD ahead of Powell's speech.
• Hopes of some BoJ monetary policy normalisation in 2024 are expecte to underpin the Yen.

The US Dollar is attempting a recovery from 2, ½-month lows at 146.65 favoured by a mild recovery on US Treasury yields, which is weighing on the Japanese Yen.

The broader trend, however, remains negative as the soft US inflation and the somewhat weaker macroeconomic data have practically confirmed the end of the Federal Reserve’s tightening cycle.

All eyes are on Fed Powell's conference

Also on Thursday, the New York Fed President, John Wiliams, suggested that interest rates might be at their peak endorsing that view. In this context, Fed Chairman Powell’s conference due later today will be analysed in detail to assess the bank’s next steps.

On the other hand, increasing expectations that the Bank of Japan will exit its ultra-loose monetary policy in 2024 are providing some support to the JPY.

From a wider perspective, the pair maintains the bearish bias from mid-November highs near 152.00, with resistance at 148.75 highly likely to cap bulls ahead of the November 22 and 23 highs at 149.75. Supports are 147.77 and 146.65.

Technical levels to watch