"BOJ's Potential Rate Lift in January Boosts USD/JPY Setup for 2023-2024"

The Bank of Japan (BoJ) is unlikely to make any changes to interest rates at its upcoming meeting, with a potential policy pivot expected in Q2 2023. The BoJ is looking for reassurance that inflation is being driven by demand rather than supply-side issues. Recent movements in USD/JPY can be attributed to the narrowing yield differential between the US and Japan. The pair continues to trade within an ascending channel, with support at the lower bound and the August swing low. Market participants will closely analyze the BoJ statement for any hints about the timing of a policy reversal, but the central bank may choose to keep markets waiting.