USD/JPY holds gains near 156.50 on hawkish Fed vs passive BoJ divergence

USD/JPY maintains its bullish momentum near 156.50, supported by the widening monetary policy divergence between a hawkish Federal Reserve and a passive Bank of Japan. The pair has gained 0.4% (62 pips) in today's session, extending its weekly advance to 1.2%. The Fed's higher-for-longer stance contrasts sharply with the BoJ's reluctance to normalize policy despite rising inflation pressures. US Treasury yields remain elevated, with the 10-year yield holding above 4.25%, enhancing the dollar's carry trade appeal. Japanese officials have expressed verbal concerns about yen weakness but have not signaled imminent intervention. Technical indicators show USD/JPY testing resistance at 156.75, with a break potentially opening the path to 157.50. Support levels are established at 156.00 and 155.50. Traders should remain vigilant for any shift in BoJ rhetoric or surprise intervention, which could trigger sharp reversals in the pair.