USD/JPY Continues to Climb Amid External and Domestic Pressures

USD/JPY rose to 157.65 on Wednesday, marking a third consecutive day of gains. The yen came under pressure following stronger-than-expected US inflation data, reinforcing expectations that the Federal Reserve will maintain its hawkish stance.

Market focus remains on the Bank of Japan. Following its April meeting, some policymakers signalled the possibility of a further rate hike. Rising global oil prices are adding to inflationary pressures in Japan. The OECD forecasts that the BoJ’s key rate could reach 2% by the end of 2027.

Currency markets are also watching for potential interventions. US Treasury Secretary Scott Bessent noted that Washington and Tokyo view excessive currency volatility as undesirable, which was seen as indirect support for Japan’s efforts to stabilise the yen.

Technical Analysis

On the H4 chart, USD/JPY is trading around 157.33, with a breakout suggesting further upside towards 157.97. A short-term correction to 156.50 is possible before a potential move higher resumes. The MACD indicator, above zero and pointing firmly upwards, supports further gains.


On the H1 chart, USD/JPY has reached 157.77 and is moving lower towards 157.30. A subsequent rise towards 157.97 is possible. The Stochastic oscillator confirms short-term bullish momentum, although a pullback may develop, indicating some near-term downside risk.

Conclusion

USD/JPY is advancing under both external and domestic influences, supported by technical indicators. While short-term corrections are possible, the broader trend remains upward.

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