USD/JPY: Yen Strengthens After BOJ Rate Decision Boosts JPY Demand

USD/JPY has moved lower as the Japanese yen gained broad support in the wake of the Bank of Japan's latest monetary policy decision. While the BOJ opted to keep rates unchanged, the accompanying statement and tone reinforced expectations that the central bank remains committed to its gradual normalization path. The yen's appreciation reflects market participants pricing in continued divergence between BOJ tightening signals and potential Federal Reserve easing later in the cycle. The decision comes amid a challenging backdrop of elevated energy prices driven by the Iran conflict, which has amplified inflationary pressures in Japan and complicated the BOJ's policy calculus. Despite holding rates steady, the central bank acknowledged persistent cost-push inflation, which traders interpreted as supportive of future hikes. On the technical front, USD/JPY faces immediate support at the 142.00 psychological level, with a break below potentially opening the door toward 140.50. Resistance is positioned near 144.00. Traders should remain attentive to US economic data releases this week for further directional cues on the pair.