"USD/JPY Forecast: Impact of Fed and BoJ on Yen's Performance"

The Japanese Yen's Q1 prospects hinge on the contrasting policies of the Bank of Japan and the Federal Reserve, with market hopes of BoJ interest rate hikes supporting the Yen at year-end. However, the Fed's likely rate reductions in 2024 are expected to weaken the Dollar, impacting USD/JPY dynamics. The BoJ is unlikely to shift policy without clear signs of domestic inflation, making it crucial for Yen traders to monitor Fed announcements and Japanese inflation data. Despite potential unwinding of the Yen carry trade due to lower US rates, the Yen's appeal for yield seekers remains limited.