The USD/JPY pair surged to a nine-day peak of 158.86 following the Bank of Japan's (BoJ) first policy decision of 2026, with the momentum accelerating sharply during Governor Kazuo Ueda's post-meeting press conference. The pair later saw a missive flush toward 157.308. While the central bank technically stood pat, the market's read of the event was one of a hawkish hold, as the divergence between official rhetoric and the surging Japanese Government Bond (JGB) yields forced a frantic repricing of the yen's path.
USDJPY touched 159.3 during the Asian session this morning, breaking above its 52-week high. This move is neither random nor purely technical; instead, it reflects a deeper shift in how the market is reassessing the relative strength of the U.S. dollar versus the Japanese yen. On the U.S. side, the strength of the dollar, with the DXY rising toward 98.8 - was reinforced after the latest inflation data failed to deliver the kind of cooling surprise markets had hoped for.
From my perspective, this decline is not merely a short-term move but a reflection of deeper shifts in global monetary sentiment-specifically the narrowing gap between the two countries' policies, which has already begun translating into accumulated selling pressure on the pair. Market behaviour during Thursday's session is clear: the entry of new sellers reflects a lack of confidence in the dollar's ability to maintain its momentum, especially after failing to capitalize on the modest rebound from 155.65, the lowest level in a week.
The USD/JPY pair is moving on a volatile path, reflecting the uncertainty that dominates global markets. The pair managed twice to approach the 149.00 level during Wednesday's trading, even briefly reaching its highest level in five weeks at 149.14, but it failed to break above the 200-day EMA near 148.22. This reveals a lack of momentum, as traders await the pivotal U.S. economic data scheduled for release this week.
