USD/JPY Consolidates at 156.50 Between Fed Patience and BoJ Rate Hike Risks

USD/JPY traded in a narrow range around 156.50, caught between Federal Reserve's patient stance on rate cuts and mounting pressure for Bank of Japan policy normalization. The Fed's continued hawkish rhetoric supports dollar strength, with officials emphasizing no urgency to ease policy amid resilient US economic data. However, speculation grows that the BoJ may accelerate rate hikes as Japanese inflation remains above target at 2.3% and wage growth accelerates. Market positioning shows increased yen longs as traders bet on BoJ action potentially in March. Technical indicators reveal USD/JPY trapped between support at 155.80 and resistance at 157.20, with declining volatility suggesting a breakout approach. A decisive move above 157.20 could target 158.50, while a break below 155.80 might accelerate yen strength toward 154.00.