FxWirePro: USD/JPY remains buoyant, looks to extend gains

• USD/JPY edged higher on Tuesday as investors continued to assess the interest-rate differential between the U.S. and Japan.

•The Japan-U.S. government bond yield differential remains elevated despite easing from recent highs. The still-wide spread continues to favour the U.S. dollar over the yen, providing support to USD/JPY and keeping the pair near the upper end of its recent trading range.

• Meanwhile, Bank of Japan Governor Kazuo Ueda said on Tuesday that it was becoming increasingly important to keep underlying inflation anchored around the central bank’s 2% target, signalling that the BOJ remains prepared to raise interest rates further if needed to contain the risk of persistent inflation.

 •He also warned of the risk of underlying inflation overshooting the BOJ's target due to price pressures from the US-Israeli war on Iran, strong AI-related demand and the weak yen.

• Immediate resistance is located at 158.79(50%fib), any close above will push the pair towards 159.79(Higher BB).

•  Support is seen at 156.78(Lower BB) and break below could take the pair towards 156.36(61.8%fib)

Recommendation: Good to buy  around 158.00, with stop loss of 157.40and target price of 158.70