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DBS Group Research analyst Chang Wei Liang highlighted that Japan’s March CPI data revealed persistent underlying inflationary pressures, with both headline and core-core inflation rising. The Bank of Japan (BoJ) is reportedly planning to revise its inflation forecast upward, which could influence future monetary policy decisions. The USD/JPY pair is currently supported near key levels but faces a ceiling below 160, indicating a potential range-bound consolidation phase.
This development is significant for forex traders as it underscores the BoJ’s potential shift in policy stance amid rising inflation. A revised inflation forecast could lead to tighter monetary conditions, impacting the yen’s value and cross-currency dynamics. Traders should monitor the BoJ’s next policy meeting for clarity on inflation targets and rate guidance.
For the broader market, the USD/JPY’s technical resistance near 160 remains critical. A breakout could signal renewed bullish momentum, while a sustained decline below support levels might trigger a reevaluation of the pair’s medium-term trajectory. Investors should also track Japan’s economic data releases and global risk sentiment for further directional cues.
