• USD/JPY gains positive traction for the fourth straight day amid a combination of supporting factors.
• Mideast tensions, inflation fears, and less dovish Fed bets continue to underpin the safe-haven USD.
• Economic concerns due to energy supply disruptions and delayed BoJ rate hike bets weigh on the JPY.

The USD/JPY pair attracts some buyers for the fourth consecutive day and trades around the 159.65-159.70 area, or a one-and-a-half-week top during the early European session on Thursday. Spot prices, however, remain confined within a familiar range, held over the past month or so as traders seem reluctant to place aggressive directional bets amid a combination of diverging forces.

Despite a temporary extension of the US-Iran ceasefire, the lack of progress in peace talks and the standoff over the Strait of Hormuz continue to weigh on investors' sentiment. Moreover, the risk of a further escalation of tensions remains supportive of elevated Crude Oil prices, fueling inflationary concerns and tempering dovish US Federal Reserve (Fed) expectations. This, in turn, is seen underpinning the US Dollar's (USD) reserve currency status and acting as a tailwind for the USD/JPY pair.

The Japanese Yen (JPY), on the other hand, is weighed down by worries that Japan's economy will come under substantial strains due to continued disruptions to energy supplies from the Middle East. Adding to this, growing acceptance that the Bank of Japan (BoJ) will hold interest rates steady at its upcoming April policy meeting turns out to be another factor undermining the JPY and supporting the USD/JPY pair. The BoJ, however, is still expected to show readiness to raise borrowing costs as soon as June.

Furthermore, speculations that Japanese authorities will step in to stem further weakness in the domestic currency hold back the JPY bears from placing aggressive bets and keep a lid on any further appreciating move for the USD/JPY pair. Hence, it will be prudent to wait for a sustained move beyond the 160.00 psychological mark, also representing the top boundary of a short-term trading range hurdle, before positioning for the resumption of over a two-month-old uptrend from the February swing low.