USD/JPY pressured as BOJ's Ueda hints at September rate hike on FX volatility

USD/JPY is trading defensively as Bank of Japan Governor Kazuo Ueda reinforced expectations that policy normalization will continue, with markets now pricing a meaningful probability of a hike at the September meeting. Ueda flagged that recent yen volatility and the pass-through of import costs into domestic inflation remain central to the policy calculus, keeping headline CPI above the BOJ's 2% target. The comments follow a run of yen weakness that has repeatedly drawn verbal intervention from Japanese officials, and traders continue to watch the Ministry of Finance for signs of physical FX action should depreciation accelerate. Rate differentials remain the dominant driver, so any narrowing versus US Treasury yields would amplify yen strength. On the charts, USD/JPY faces near-term support around the 148.00 area, with a break exposing the 146.50 region; resistance sits near 151.00 and the recent cycle highs. Traders should expect elevated two-way volatility in JPY crosses including EUR/JPY and GBP/JPY into the BOJ decision, with headline risk from Ueda's press conferences.