USD/JPY is consolidating Wednesday’s strong advance, hovering near the 155.00 mark early Thursday. The bullish bias remains intact as concerns over Japan’s fiscal outlook and a generally positive market sentiment continue to weigh on the safe-haven Japanese Yen.
At the same time, the latest FOMC Minutes revealed divisions among Fed officials regarding the need and timing of additional rate cuts amid lingering inflation risks. This uncertainty lends support to the US Dollar, providing an added tailwind for the pair.
USD/JPY Technical Overview
The US Dollar (USD) is trading with a mild bullish bias against the Japanese Yen (JPY) this week, hovering near the top of the 153.00 range. However, the pair remains confined within its weekly boundaries, as resistance around 154.00 continues to cap upside attempts ahead of the release of the minutes from the US Federal Reserve’s latest meeting.
Fundamental Overview
The Federal Reserve kept its benchmark rate unchanged at 3.5%–3.75% and signaled that policy is likely to remain steady in the near term. The meeting minutes are expected to underscore divisions within the committee—differences that are drawing added attention after last week’s softer U.S. inflation data and disappointing jobs report.
On Tuesday, Chicago Fed President Aistan Goolsbee pointed to those internal splits, noting that if inflation continues to ease, the central bank could lower rates multiple times this year.
In Japan, weak fourth-quarter GDP data released Monday have renewed worries about the country’s economic prospects, reinforcing Prime Minister Sanae Takaichi’s push for substantial fiscal stimulus and tax cuts.
Meanwhile, the International Monetary Fund cautioned that reducing the consumption tax could strain public finances and urged the Bank of Japan to tighten monetary policy further to keep inflation in check. As a result, the yen’s recent bullish momentum has faded somewhat, offering relief to the previously pressured U.S. dollar.
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