• USD/JPY traded around 158.00 on Friday, remaining near three-week high and within sight of the key 160 level, which could test Tokyo’s resolve to curb further yen weakness..
• The yen has remained under pressure amid a firmer dollar and a sharp rise in Treasury yields, with markets increasingly betting on additional Federal Reserve tightening to tackle persistent inflation..
• A weaker yen is putting pressure on Japan’s policymakers as higher import costs risk adding to inflation. The currency remains under pressure partly because the BOJ has been raising rates gradually, while the U.S.-Japan rate differential remains wide.
• Tokyo’s willingness to curb excessive yen weakness could face another test if USD/JPY extends its gains sharply. The pair will remain sensitive to movements in U.S. Treasury yields and differences between Fed and BoJ policy paths.
• Immediate resistance is located at 160.15(38.2%fib), any close above will push the pair towards 161.56(Higher BB).
• Support is seen at 157.02(50%fib) and break below could take the pair towards 156.53(SMA 20)
Recommendation: Good to buy around 158.00, with stop loss of 157.50 and target price of 158.70
