USD/JPY surges to 156.00 as BoJ signals extended rate hikes ahead

USD/JPY has climbed 0.26% to 156.00, leading major currency pairs as the dollar stabilizes following two days of declines. The move comes as Treasury yields rebound, with the 10-year yield rising 3.7 basis points, reversing last week's similar decline. Bank of Japan officials are signaling that their rate-hiking cycle will likely extend beyond 0.75%, providing fundamental support for the yen's longer-term outlook. However, the immediate price action favors dollar strength as markets position ahead of the North American session. Technical analysis shows EUR/USD and GBP/USD setting the directional tone, with traders closely monitoring these pairs for broader market sentiment. The combination of rising US yields and BoJ policy expectations creates a complex trading environment, suggesting increased volatility ahead as central bank divergence remains a key theme.