rose to 159.19, keeping the yen near its one-month lows following comments from Bank of Japan Governor Kazuo Ueda. The regulator warned of rising inflation risks but did not provide any clear signal on a possible rate hike at the next BoJ meeting.
Ueda noted the need to closely monitor the impact of high oil prices on inflation in Japan, but did not specify to what extent these factors could influence the regulator's decision in June.
At the same time, Bank of Japan Deputy Governor Ryozo Himino confirmed that the central bank remains prepared for further rate hikes. However, the timing and pace of policy tightening will depend on how the Middle East conflict affects the Japanese economy and inflation.
Investors are also closely monitoring the situation surrounding the talks between the United States and Iran. Despite isolated signs of progress in negotiations, continued military action and tensions are keeping currency markets nervous.
Technical analysis
On the H4 chart, USD/JPY is trading within a consolidation range around 159.00 and moving towards 159.60. A test of this level is likely, followed by a possible pullback to 159.00. The MACD indicator supports this scenario, with its signal line above zero and pointing firmly upwards, indicating continued bullish momentum.
On the first half chart, USD/JPY rises towards 159.50. A correction to 159.00 may follow, before a further rise towards 159.60 and potentially 159.90. The stochastic oscillator confirms this scenario, with its signal line above 50 and pointing firmly towards 80, indicating that the short-term bullish momentum remains.
Conclusion
USD/JPY continues its upward move as the dollar remains strong amid elevated inflation risks. The yen hovers near one-month lows after Bank of Japan Governor Ueda warned of rising inflation pressures but stopped short of signaling a near-term rate hike. While Deputy Governor Himino reaffirmed the Bank of Japan's willingness to tighten policy further, the timing remains dependent on how the Middle East conflict impacts Japan's economy and inflation. Meanwhile, uncertainty remains around negotiations between the United States and Iran, with isolated progress offset by continued military tensions. Technically, a further rise towards 159.60-159.90 seems likely, with intervention risks remaining a key factor as the pair approaches psychologically significant levels.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
