• USD/JPY edged higher on Thursday as ongoing Middle East tensions continued to weigh on the yen.
• Despite the gradual grind higher, Japanese authorities have so far refrained from intervening in the FX market, suggesting a continued wait-and-see approach.
• Market participants note that the Ministry of Finance (MOF) may still be conserving intervention capacity, potentially coordinating any future action with the Bank of Japan to maximise impact.
• On monetary policy expectations, a 25-basis-point hike by the BOJ is already largely priced in, but markets are increasingly focused on whether policymakers could deliver a larger move or signal additional tightening in July.
• Speculation is also building around Governor Kazuo Ueda’s absence from key discussions, adding uncertainty and fueling market chatter about internal policy dynamics.
• Immediate resistance is located at 160.85(23.6%fib), any close above will push the pair towards 161.01(Higher BB).
• Support is seen at 160.00 (Psychological level) and break below could take the pair towards 159.57 (SMA 20).
Recommendation: Good to buy around 160.20, with stop loss of 159.70 and target price of 160.70
