• The BoJ's March summary showed a hawkish tilt, with one member floating the idea of a larger rate hike.
• Fed Chair Powell struck a patient tone at Harvard, reinforcing the FOMC's decision to hold rates steady.
• Monday's Tokyo CPI and Tuesday's Tankan survey will sharpen expectations for the BoJ's next move.

USD/JPY slipped 0.38% on Monday, falling back below the 160.00 handle to settle around 159.70 after briefly touching a fresh year-to-date high near 160.50 late last week. Monday's candle printed a bearish reversal with a long upper wick, covering a range from about 160.50 to 159.30, with a close in the lower half. The rejection from the 160.00 to 160.50 zone marks the first meaningful pushback from sellers since the rally began from the February lows near 152.10.

The Bank of Japan (BoJ) released its March Summary of Opinions on Monday, which showed a notably hawkish tilt. One board member said the central bank should raise rates "without hesitation" if conditions hold, while another floated the possibility of a larger-than-usual hike to address the energy shock from the Middle East conflict. The BoJ held at 0.75% at its March meeting in an 8-1 vote, with board member Hajime Takata dissenting in favor of 1.00%. Heading into Tuesday, Tokyo Consumer Price Index (CPI) data for March is due late Monday, with core inflation (excluding fresh food) expected at 1.8% YoY, followed by the Tankan Large Manufacturing Index on Tuesday, where consensus sits at 16 versus 15 prior.

On the US Dollar side, Federal Reserve (Fed) Chair Jerome Powell struck a patient tone at Harvard on Monday, saying the current rate stance is appropriate and that the Fed tends to look through supply-driven price spikes such as the ongoing oil shock. The comments reinforced the Federal Open Market Committee's (FOMC) decision to hold rates at 3.50% to 3.75% in March, where officials revised their headline Personal Consumption Expenditures Price Index (PCE) inflation forecast up to 2.7%. In contrast, Fed Governor Stephen Miran, the sole dissenter at every meeting since his appointment, continued to push for cuts but acknowledged raising his year-end rate projection by 50 basis points after disappointing inflation data. The split highlights a widening gap between the committee's wait-and-see majority and a dovish minority that sees the labor market cooling faster than the headline data suggest.

USD/JPY daily chart

Technical Analysis

In the daily chart, USD/JPY trades at 159.69. The near-term bias stays bullish as price holds well above the rising 50-day EMA, which in turn remains comfortably above the 200-day EMA, confirming an established uptrend. Recent candles show only shallow pullbacks within this broader advance, while the Stochastic RSI has eased from prior overbought extremes without breaking down, indicating momentum is cooling rather than reversing. This combination points to a market that is consolidating gains at elevated levels rather than signalling a clear topping pattern.

Initial resistance appears at the 160.30 area, the recent swing high, with a sustained break opening the way toward the 161.00 region next. On the downside, immediate support emerges near 158.50, where the latest reaction low forms a first floor. Below that, the 157.30 zone lines up with prior consolidation and sits not far above the rising 50-day EMA, making it a more important downside level; a daily close beneath it would start to undermine the current bullish structure.

(The technical analysis of this story was written with the help of an AI tool.)