USD/JPY Tests Key Resistance as BOJ Hike Expectations Shift

Japanese markets turned volatile after reports said Prime Minister Sanae Takaichi expressed concerns about further rate hikes to BOJ Governor Kazuo Ueda. This created uncertainty around the Bank of Japan’s policy path. At the same time, China announced new export restrictions on dual-use goods and rare earth materials to selected Japanese firms, adding geopolitical pressure and further weakening the yen.

Rate expectations shifted quickly. Chances of a March hike dropped to below 10%, and April is now seen as uncertain rather than almost guaranteed. However, markets still expect one full rate hike by July and another by December.

Technically, USD/JPY is testing a key zone near the 50-day moving average and a downtrend line. Momentum indicators are turning more positive, suggesting upside pressure is building. A break above 156.25 could open the way toward 157.50. On the downside, a move below 155.65 would shift the short-term bias lower, bringing 155.00 and 154.00 into focus.

USD/JPY Daily Chart