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USD/JPY Faces Resistance as BOJ Signals Caution
USD/JPY trades around the resistance of $151 as markets react to comments from Bank of Japan Governor Kazuo Ueda. He reaffirmed that the BOJ may raise rates if the economic outlook supports it. However, he also noted that underlying inflation remains below the 2% target. This signals a cautious approach to tightening. The swaps market prices in only about 50 basis points of hikes over the next year. As a result, USD/JPY may struggle to break above key resistance at $152.
USD/JPY Technical Analysis – Inverted Head and Shoulders
The 4-hour chart for USD/JPY shows that the pair has broken out of the descending channel and formed a bullish price structure. This structure is confirmed by the formation of an inverted head and shoulders pattern. A break above $151 would likely trigger an upward move in USD/JPY.
