Yen weakness builds as USD/JPY nears key resistanceUnited States Dollar / Japanese YenCMCMARKETS:USDJPYcmcmarketsUSD/JPY has been weakening against the dollar, moving above 159 and towards 159.50. The area around 159.50 has served as a modest level of support and resistance for the Japanese yen from mid-April, before the intervention seen at the end of that month. A break above 159.50 could see USD/JPY rally towards 160.50, taking it back to the highs reached before the Japanese government's intervention. There are also signs that momentum is building, with the RSI moving towards 60, suggesting it could continue to accelerate for some time before USD/JPY reaches overbought territory. Yen faces challenges In addition, the Bank of Japan's next policy meeting is not until the week of 15 June, leaving the market time to further weaken the yen against the dollar, especially if the market believes the BoJ will not raise rates at the upcoming meeting. This could add pressure on the Bank of Japan ahead of its policy decision on whether to raise interest rates. At present, markets are increasingly anticipating a rate rise by the Bank of Japan at either the June or July meeting. The odds of a hike in June currently stand at around 70%, while the odds of a hike by July are almost 80%. Another point of weakness for the yen is that oil prices have remained elevated. Although prices have retreated somewhat, a renewed move higher towards the $100-per-barrel level could place further pressure on the Japanese currency, causing it to weaken further against the US dollar. 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.