USD/JPY threatens the December low with BOJ set to boost inflation forecasts

It’s a holiday-like day in the foreign exchange market as much of the world takes an extra day off to celebrate the new year.

The focus for me today is on the yen after a report in Nikkei that said the new Bank of Japan inflation forecasts on January 18 would show prices close to target in 2024.

That would pave the way for a policy normalization and prove to be a further tailwind for the yen. USD/JPY is down 44 pips today to 130.66, which threatens stops below the December low of 130.57 and the 130.00 barrier.