USD/JPY Surges Above 157.00 on BoJ Policy Uncertainty and Yield Gap

USD/JPY has rallied 0.7% to 157.20, marking a fresh multi-month high as uncertainty surrounding Bank of Japan policy decisions keeps the yen under sustained pressure. The US-Japan yield differential has widened to 380 basis points, with US 10-year yields at 4.65% versus Japan's 0.85%, driving carry trade flows into the pair. Market participants remain skeptical about the BoJ's commitment to policy normalization, with Governor Ueda's recent comments suggesting continued accommodation. Technical indicators show strong bullish momentum with RSI at 72, approaching overbought territory. The pair has broken above the key 156.50 resistance, opening targets toward 158.00 and potentially 160.00. Support has formed at 156.00, coinciding with the previous resistance level. Risk-off sentiment paradoxically supports USD/JPY as dollar strength outweighs traditional yen haven demand. Traders should monitor any shifts in BoJ rhetoric or intervention warnings from Japanese officials.