• USD/JPY edged higher on Friday as Japanese yen weakened amid BoJ policy uncertainty and escalating Middle East conflict.
• The conflict escalated further on Thursday, with U.S. and Israeli jets striking targets across Iran and cities in the Gulf region coming under renewed bombardment as the war widened.
• Kazuo Ueda, Governor of the Bank of Japan, warned that the Middle East conflict could hurt Japan’s economy and keep interest rates on hold for longer.
• The remarks highlight the challenge the BOJ faces in timing the next interest rate hike, as uncertainty over the Middle East conflict clouds the outlook for a fragile economy.
• Looking Ahead, Market participants awaiting Friday’s Nonfarm Payrolls (NFP) report, with expectations around +59K for February, following January’s stronger-than-expected +130K reading.
• Immediate resistance is located at 158.65 (Higher BB), any close above will push the pair towards 159.08(23.6%fib).
• Support is seen at 156.58 (38.2%fib) and break below could take the pair towards 155.37(SMA 20 ).
Recommendation: Good to buy around 157.60, with stop loss of 157.00 and target price of 158.60
