USD/JPY Continues to Strengthen Ahead of PCE Data ReleaseUSD/JPYOANDA:USDJPYNouzTraderUSD/JPY USDJPY experienced a moderate pullback during Thursday's Asian trading session but found solid support around 161.50. This subdued price movement reflects mass position squaring by global institutions. Market players are opting for a defensive stance to clear directional exposure ahead of the Federal Reserve's most sacred inflation data release tonight. ------------------------------------------------------------------------------------------------------- ✅ The Yen Side: Naoki Tamura's Neutral Interest Rate Doctrine & the Katayama-Bessent Pact The Japanese yen (JPY) is gaining some breathing room thanks to the confluence of bilateral intervention threats and the affirmation of a hawkish stance by Bank of Japan officials: - Tamura's 2% Interest Rate Target: Influential BoJ board member Naoki Tamura issued a surprising statement Thursday morning. He asserted that the BoJ should aggressively push its policy interest rate closer to the economic neutral level, which he projects to be around 2.00% (double the current policy rate of 1.00%). - BOJ's Core Inflation Risk: The Tamura Doctrine aligns with the BOJ's June Meeting Summary of Opinions released today. ✅ Dollar Side: Oil Weakening Dampens USD Ahead of Super PCE Data The US dollar (USD) experienced a minor downward correction from its one-year peak touched on Wednesday due to adjusted inflation expectations: - Strait of Hormuz Crackdown Catalyst: The limited opening of the Strait of Hormuz under IRGC supervision and the US's 60-day sanctions waiver triggered a flood of Iranian crude oil supplies. - Hawkish Bet Reduction: The fading spectre of energy inflation has traders slightly cutting back their aggressive bets on further Fed rate hikes under Kevin Warsh. ------------------------------------------------------------------------------------------------------- ✅ Technical Analysis 4-Hour Chart (H4) Technically, on the 4-hour chart (H4), USD/JPY is in a healthy horizontal consolidation phase, maintaining the long-term uptrend (overall uptrend): - Strong Level 161.50: The price's successful rebound above 161.50 indicates that buyers (bulls) still control the daily market structure. As long as USD/JPY trades above the 160.50-160.60 area, the macro-level path of least resistance remains upward.