USD/JPY Stays Bullish as Fed Expectations Support the Dollar

USD/JPY moved back above 159 as markets focused more on rising inflation risks, higher energy prices, and global geopolitical tensions rather than stronger Japanese economic data. Although Japan’s GDP growth came in better than expected, investors remain concerned about the Bank of Japan’s weaker growth outlook and rising inflation pressures, creating concerns about a possible stagflation environment.

Markets are also watching upcoming Japanese CPI data after inflation accelerated in March, while expectations for further Federal Reserve tightening continue supporting the US dollar as higher energy prices keep inflation concerns elevated in the US.

Technically, USD/JPY remains bullish while holding above its multi-month rising trendline and the 50-day moving average. Resistance is seen near the key 160 level, while support remains near 158.00, followed by 156.00. A sustained break below 155 would weaken the broader bullish outlook.

USD/JPY Daily Chart