• USD/JPY edged higher on Monday as the dollar strengthened on expectations the Fed may raise interest rates later this year to curb inflation.
• Surging energy prices from the Middle East conflict added to U.S. inflation pressures as U.S.-Iran talks showed little progress toward peace or reopening the Strait of Hormuz.
• Officials in Tokyo intervened a couple of times in late April and into early May, which saw the yen strengthen by around 3.5% in the days that followed, but the currency has given up roughly 7% of that rally already.
• Japan's government is likely to issue fresh debt as part of funding for a planned extra budget to cushion the economic blow from the Middle East war, a government source with direct knowledge of the deliberations told Reuters on Monday.
• Immediate resistance is located at 159.09 (38.2%fib), any close above will push the pair towards 159.87(April 23rd high).
• Support is seen at 158.28 (SMA 20) and break below could take the pair towards 157.81(50%fib).
Recommendation: Good to buy around 158.70, with stop loss of 158.20 and target price of 159.50
