USD/JPY surges as Bank of America suggests hedge for Middle East risks

USD/JPY has rallied nearly 1% to 147.38 in Monday's session, with Bank of America recommending the pair as a strategic hedge against escalating Middle East tensions. The sharp appreciation reflects renewed safe-haven demand for the dollar amid geopolitical uncertainties, while the yen's traditional haven status appears diminished by Japan's ultra-loose monetary policy stance. The move breaks above the key 147.00 psychological level, suggesting momentum could extend toward the 148.00 resistance zone. Technical indicators show the pair clearing its 20-day moving average at 146.85, confirming bullish momentum. Bank of America's recommendation highlights USD/JPY as an effective portfolio hedge, given the dollar's strength during risk-off episodes and the Bank of Japan's commitment to maintaining accommodative policies. Traders should monitor the 146.50 support level on any pullbacks, while a sustained break above 148.00 could open the path toward 150.00.