USD/JPY extends rally as yen weakness persists on yield differentials
USD/JPY continues its upward trajectory, trading near multi-week highs as the Japanese yen remains under pressure from widening yield differentials between US and Japanese government bonds. The pair has gained approximately 2.5% this week, breaking above key resistance levels as traders position for divergent monetary policies. The Bank of Japan's reluctance to aggressively tighten policy contrasts sharply with the Federal Reserve's higher-for-longer stance, supporting dollar strength against the yen. Technical indicators suggest bullish momentum remains intact, with the pair eyeing the 152.00 psychological level as the next target. Support has formed at 150.50, coinciding with the 20-day moving average. Traders should monitor any shifts in BOJ rhetoric or unexpected US economic data that could alter the current dynamics driving this major currency pair higher.
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