USD/JPY surges following Fed and BoJ policy announcements

USD/JPY surged to a new multi-month high on Thursday, following the Bank of Japan’s decision to maintain interest rates unchanged during its policy meeting, further reinforcing the positive signals from the Fed’s hawkish rate cut on Wednesday.

Although the BoJ’s decision was widely expected (unchanged rates at 0.15%), the central bank emphasized a cautious approach to monetary policy moving forward, particularly in light of the potential impacts from the incoming Trump administration and the need to carefully assess future economic data.

The dovish stance of the BoJ, combined with the widening divergence between the monetary policies of the Fed and BoJ, added downward pressure on the yen and created more favorable conditions for the U.S. dollar.

The break of the key resistance level at 156.74 (November 15 high) signals the end of the corrective phase and likely continuation of the uptrend from 139.57 (2024 low, posted on September 16).

A sustained break above 156.74 is required to confirm this bullish signal and open the path toward further gains, with 157.86 (July 16 high) coming into focus.

On the downside, daily indicators are showing overbought conditions, suggesting that fresh gains may pause after the recent strong rally. However, the dollar is expected to remain well-supported, with limited dips likely serving as a foundation for renewed upside momentum.

Res: 157.14; 158.00; 158.66; 159.00
Sup: 155.88; 154.72; 154.43; 153.41