USD/JPY surges as BOJ Governor Ueda signals cautious rate hike approach

USD/JPY has jumped 0.8% (120 pips) to 156.20 following dovish comments from Bank of Japan Governor Ueda, who emphasized that rate hikes would only occur if economic and price outlooks materialize as expected. The yen's sharp decline was exacerbated by disappointing Chinese manufacturing data, with the Caixin PMI falling to 48.3 in May, indicating continued contraction. Meanwhile, RBA minutes revealed no immediate plans for expansionary policy, keeping AUD/JPY elevated. The PBOC set the USD/CNY reference rate at 7.1869, reflecting regional currency weakness. Technical analysis shows USD/JPY breaking above the 155.50 resistance level, with next targets at 156.80 and 157.00. The combination of BOJ's patient stance and global growth concerns suggests continued yen weakness, particularly if upcoming US data reinforces dollar strength.