FxWirePro: USD/JPY extends fall as Yen strengthens on BOJ rate hike signals

• USD/JPY dipped on Thursday  as the yen strengthened following hints from Japanese policymakers that interest rates will rise later this month.

• Bank of Japan Governor Kazuo Ueda said policymakers would consider a rate hike as early as September, with inflation risks a key factor in the decision, signalling a strong possibility of a rate increase this month.

• The remarks followed a U.S. Treasury statement that Treasury Secretary Scott Bessent had met with Ueda and urged “decisive” monetary action to address the weak yen, further strengthening expectations of a Japanese rate hike this month.

• In a separate speech in northern Japan, hawkish BOJ board member Hajime Takata said the central bank should raise interest rates “nimbly” in response to inflationary pressures rather than follow a fixed semiannual schedule, helping to prevent inflation from overshooting.

•The BOJ raised interest rates to a 31-year high of 1% in June, citing growing confidence that Japan was nearing a sustained achievement of its 2% inflation target.

• Immediate resistance is located at 159.26 (50%fib), any close above will push the pair towards 160.33(Sep 2nd high).

•  Support is seen at 157.35(38.2%fib) and break below could take the pair towards 157.00(Psychological level)

Recommendation: Good to sell  around 157.40, with stop loss of 158.50 and target price of 156.60