USD/JPY gains limited despite currency talks, JPMorgan predicts

USD/JPY edged higher to 138.45 (+0.2%, 28 pips) following recent discussions between U.S. Treasury Secretary Janet Yellen and Japanese Finance Minister Shunichi Suzuki on currency issues. However, JPMorgan's Chief Japan FX Strategist Junya Tanase suggests the pair's gains may be capped, as both officials likely shared concerns over yen weakness. Japan's record trade deficit and slowing growth continue to weigh on the yen, while the widening interest rate gap between the hawkish Fed and the dovish Bank of Japan remains a key driver for USD/JPY. Resistance is seen at 139.00, with support at 137.50. Traders should monitor upcoming U.S. economic data and any further comments from officials for clues on potential currency intervention or policy shifts.