USD/JPY Approaches Significant BreakoutUSD/JPYOANDA:USDJPYcmcmarketsFollowing a hotter-than-expected U.S. producer price index, the U.S. dollar is strengthening against the Japanese yen, approaching the upper resistance level around 159.5. USD/JPY has been confined to this region over the past few trading sessions, but, more importantly, it marks resistance dating back to January 2025. A break above 159.5 could trigger a move to 162. The 160 level in USD/JPY has always been tenuous, as the Japanese government has consistently pushed back against further yen weakness by signalling potential intervention. The last time USD/JPY traded around this level was at the end of January, around the time of the BOJ’s previous meeting, when intervention fears quickly swept through the market. The BOJ is scheduled to announce the results of its upcoming monetary policy meeting on 19 March, following the Fed’s policy meeting on 18 March. With the market not expecting the BOJ to hike interest rates again until possibly summer, and also pricing out the possibility of Fed rate cuts, this creates a scenario where a delayed response from the BOJ, combined with rising inflation worries in the U.S., could weaken the Japanese yen further against the dollar, pushing USD/JPY towards the 162 level last seen in July 2024. For now, USD/JPY has found support at the 10-day exponential moving average, which has been in place since the end of February. It even fell to the 10-moving average on 18 March but managed to bounce right off it earlier in the day. A break of the moving average would suggest a reversal of the trend may be in the works. Written by Michael J. Kramer, founder of Mott Capital Management. Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.