USD/JPY: BOJ warns weak yen fuels inflation risks, intervention likely

USD/JPY remains elevated near 147.50 as former Japanese FX official Toyoo Gyoten highlights growing inflation concerns from the weakening yen. The Bank of Japan faces increasing pressure to address currency weakness that threatens to import inflation into the economy. Japan's core CPI has exceeded the BOJ's 2% target for consecutive months, primarily driven by higher import costs from the depreciating yen. Market participants are closely monitoring the 148.00 psychological level, where previous intervention occurred. Technical indicators suggest overbought conditions, with RSI above 70 on the daily chart. The Ministry of Finance has intensified verbal warnings, suggesting potential intervention if the yen weakens beyond 150.00. Traders should prepare for increased volatility and possible sharp reversals if Japanese authorities act. The upcoming BOJ policy meeting could signal a shift toward normalization, potentially supporting the yen.