USD/JPY tests 152.50 as Japanese fiscal stimulus weighs on yen yields

USD/JPY advanced 0.6% to 152.45 as Japan's announcement of additional fiscal stimulus measures pressured Japanese government bond yields and weakened the yen. The stimulus package, worth approximately 13.5 trillion yen ($88 billion), aims to support household consumption amid persistent economic headwinds. Japanese 10-year yields rose 5 basis points to 1.08%, reflecting concerns about increased government borrowing. The Bank of Japan faces a challenging balancing act between supporting growth and managing currency weakness. Technical analysis shows USD/JPY approaching key resistance at 152.80, last tested in November. A break above this level could accelerate moves toward 154.00. Support remains firm at 151.20, coinciding with the 21-day moving average. The widening US-Japan yield differential continues to favor USD strength, with the 10-year spread now at 340 basis points.