MUFG recommends shorting USD/JPY as pair gains 133 pips to 144.85

USD/JPY closed the week with a notable gain of 133 pips, reaching 144.85, prompting MUFG to recommend a short position as their trade of the week. The pair's recent strength reflects continued dollar resilience amid expectations of prolonged Federal Reserve hawkishness, while the Bank of Japan maintains its ultra-loose monetary policy stance. Despite the upward momentum, MUFG analysts likely see the current levels as overextended, with potential resistance forming near the 145.00 psychological barrier. The recommendation suggests anticipation of either profit-taking at these elevated levels or fundamental shifts that could favor yen strength. Key support levels to watch include 143.50 and the 142.00 zone. Traders should monitor upcoming US economic data releases and any shifts in BOJ communication that could validate this contrarian positioning against the prevailing trend.