Over the past 24 to 48 hours, USD/JPY has demonstrated volatility with an upward trend, closing yesterday at 158.604, a slight rise from the previous day’s 158.368. The market’s attention has been firmly fixed on Bank of Japan (BOJ) Governor Ueda Kazuo’s upcoming press conference, which is expected to provide forward guidance that will act as a key catalyst for USD/JPY movements. Investors view Governor Ueda’s comments as crucial for deciphering the BOJ’s monetary policy stance, especially amid cooling inflation and a robust Services PMI backdrop. The market widely expects the BOJ to maintain current rates but remains cautious about future policy directions.

Meanwhile, the Japanese yen is under pressure amid concerns over Japan’s fiscal health and looming BOJ rate decisions, leading investors to adopt a wait-and-see approach. Domestic political uncertainties and fiscal worries have further weighed on the yen, pushing USD/JPY higher near the 158.50 level. For average investors, this volatility signals that currency fluctuations are not just tied to economic data but also significantly influenced by political developments and central bank communications. In essence, the dynamic nature of the market means that keeping a close eye on policy announcements is critical for understanding the USD/JPY’s near-term trajectory.

Daily Chart

The daily chart reveals a sustained upward trend for USDJPY since early January, with the price firmly above key moving averages—50-day (around 156.4) and 200-day (around 149.4). The Bollinger Bands are narrowing, indicating subdued volatility, while the upper band near 159 presents a resistance level. MACD remains positive, confirming bullish momentum. This technical setup suggests persistent confidence in the dollar against the yen despite geopolitical and fiscal concerns in Japan.

1H Chart

On the hourly chart across the last 3-5 days, USDJPY shows consolidation between 157.8 and 158.6. Short-term EMAs (9 and 21) are intertwined and MACD hovers near the zero line with no decisive divergence, signaling indecision in the short run. Bollinger Bands have begun to widen slightly, indicating a potential for increased volatility. Price action is currently testing the middle Bollinger Band, awaiting a breakout likely triggered by the BOJ meeting outcomes.

Technical Trend:  Overall trend is solidly bullish with a cautious short-term consolidation phase.

Key technical insights highlight a confirmed bullish trend on the daily chart facing immediate resistance, while the hourly chart exhibits a consolidative phase with MACD signals pending confirmation. The BOJ announcement is poised to trigger volatility, especially if the statement contains new forward guidance nuances. A break above 158.684 could open the door to further advances in USDJPY, whereas a drop below short-term support at 158.32 may signal a pullback risk.

Today’s major focus is the Bank of Japan rate decision and the subsequent press conference, scheduled for late evening Hong Kong time (around 9-10 PM HKT). The benchmark rate is expected to remain at 0.75%, but Governor Ueda’s forward guidance will be key for directional clues. A dovish tone could weigh on JPY, potentially pushing USDJPY above the 158.6 resistance level. Additional economic data such as CPI and PMI releases from Japan also carry secondary influence, adding to possible short-term volatility.

Resistance & Support

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