Global FX Update: USD/JPY Rises as Dollar Index Strengthens

The US dollar has posted broad gains across major currency pairs, with the Dollar Index (DXY) climbing 0.6% to 107.25, its highest level in three weeks. USD/JPY has broken above 157.00, gaining 0.8% as yield differentials continue to favor the greenback amid diverging central bank policies. EUR/USD has retreated to 1.0795, down 0.5%, pressured by weak European economic data and persistent energy concerns. WTI crude oil's advance to $78.30/barrel is adding complexity to the forex landscape, potentially accelerating inflation concerns that could influence central bank decisions. The Bank of Japan's continued dovish stance contrasts sharply with the Fed's data-dependent approach, widening the policy gap. Technical analysis shows USD/JPY targeting 158.00 resistance, while support has formed at 156.50. For EUR/USD, the breakdown below 1.0800 psychological support suggests further weakness toward 1.0750. Traders should monitor upcoming US employment data and any BOJ policy signals for directional cues.