The usdt trc20 walletgreenback maintains bullish momentum against JPY even as Japan reports elevated core inflation figures
Market participants appear more focused on dovish signals from BOJ meeting minutes than inflation metrics
Technical formations suggest 146.15 as immediate upside target, with 147.25 representing key Fibonacci resistance
Currency traders continue favoring the US Dollar in its pairing with the Japanese Yen, with the exchange rate poised to register weekly gains approaching 1% despite fresh data showing persistent price pressures in Japan. The sustained upward movement reflects shifting market expectations regarding central bank policies on both sides of the Pacific.
Japan's latest inflation readings presented a mixed picture, with headline figures showing modest deceleration to 3.5% annual pace while core inflation - excluding volatile food and energy components - accelerated to 3.7%. This represents the highest core reading witnessed in over three years, theoretically supporting arguments for monetary policy normalization by the Bank of Japan.
However, the currency market's reaction suggests participants remain skeptical about imminent policy shifts from the BOJ. Minutes from the central bank's recent meeting revealed growing concerns among policymakers about economic vulnerabilities, potentially delaying further rate adjustments. This dovish tilt appears to outweigh inflation considerations in current market pricing.
Chart Analysis: Bullish Pattern Points to Higher Exchange Rate Levels
Technical examination of the USD/JPY chart reveals constructive price action maintaining the pair's upward trajectory. The formation of successively higher lows since establishing support near 142.15 indicates building momentum that could propel the exchange rate toward significant resistance zones.
Market technicians identify 145.35 as a critical inflection point, with sustained trading above this level confirming the continuation of the current bullish phase. Should this scenario materialize, the May peak at 146.15 emerges as the immediate upside objective, followed by the 147.25 area representing the 78.6% retracement of the late-May decline.
On the flip side, traders should monitor the 144.35 and 143.65 levels as potential support zones that could arrest any corrective moves. A decisive break below 142.80 would invalidate the current technical setup and suggest trend reversal potential.
The relative strength of the US Dollar across currency markets remains notable, with the greenback outperforming most major counterparts this week. This broad-based strength contributes to the USD/JPY's upside momentum as market participants continue favoring dollar-denominated assets amid ongoing economic uncertainty.
Currency strategists emphasize the importance of monitoring upcoming economic data releases and central bank communications, as these factors could either reinforce or challenge the current technical outlook. The interplay between US economic resilience and Japan's gradual policy normalization path will likely determine the pair's medium-term trajectory.