USD/JPY nears breakout as yen intervention gains fade
USD/JPY is testing a key resistance level as yen gains from suspected intervention fade, with markets focused on Fed policy divergence and US inflation data.
The US dollar is regaining ground against the Japanese yen, pushing USD/JPY toward a key upside breakout as the yen's intervention-led gains continue to fade. The pair is flirting with resistance levels that, if cleared, could signal a resumption of the broader uptrend.
The dollar's strength comes as US and Iran rejected respective war-ending proposals, keeping geopolitical tensions elevated. Meanwhile, US inflation data came in higher than expected, reinforcing expectations that the Federal Reserve will maintain a hawkish stance. Several Fed policymakers have abandoned the easing bias, with some explicitly discussing the possibility of rate hikes. This policy divergence between the Fed and the Bank of Japan, which remains committed to ultra-loose monetary policy, is a key driver for USD/JPY. Traders can monitor the pair's real-time movements on NowPrice's live FX dashboard.
Looking ahead, the reopening of the Strait could weigh on the greenback in the short term, as oil prices would likely fall quickly, easing inflation worries and reviving rate cut bets. However, the focus will quickly shift back to Fed rhetoric and US economic data. Key levels to watch include the recent highs near 155.00, with a break above opening the door to further gains. On the downside, support lies around 153.50, with a failure to hold that level potentially triggering a retest of the 152.00 area.