Yen Strength Gathers Momentum Ahead of BOJ Policy DecisionUnited States Dollar / Japanese YenCMCMARKETS:USDJPYcmcmarketsThe market is preparing for a Bank of Japan rate hike at this week’s policy meeting, with growing signs that a rate hike is coming. This has had a significant impact on USD/JPY, which has reversed lower over the past couple of trading sessions as speculation has intensified. USD/JPY now appears to be reversing what initially appeared to be a breakout from a bull flag pattern, which had suggested a weaker yen. Instead, the pair is now sitting near support between 154.50 and 155. A break below this zone could lead to a more pronounced decline, potentially taking USD/JPY back towards 151. Looking at the longer-term chart, USD/JPY appears to have formed a bump-and-run pattern that is now beginning to play out. This suggests the pair could fall below 150 over the medium term, which corresponds to the lower trendline of that formation. Looking at the longer-term chart, USD/JPY appears to have formed a bump-and-run pattern that is now beginning to play out. This suggests the pair could fall below 150 over the medium term, which corresponds to the lower trendline of that formation. How much USD/JPY strengthens beyond the technical projections will ultimately depend on how committed the BOJ is and how hawkish a stance it adopts when it presents this week’s expected rate hike. Strong language signalling that further rate hikes are to come would likely lead to additional yen strength over time. 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.