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The USD/JPY pair showed a strong recovery following a decline on Thursday, with technical indicators highlighting 156 as near-term support and the 158–160 range as critical resistance for the next upward movement. Traders are closely monitoring these levels to gauge the pair's momentum amid shifting market sentiment. The rebound suggests renewed confidence in the US Dollar, potentially driven by diverging monetary policies between the Federal Reserve and the Bank of Japan. For forex traders, the USD/JPY reversal is significant as it reflects broader trends in the dollar's strength against safe-haven currencies. A break above 160 could signal a shift in market dynamics, attracting more speculative buying. Conversely, a failure to hold above 156 might reignite bearish momentum. This pair remains a key barometer for risk appetite and central bank interventions. Looking ahead, investors should watch for policy updates from the Fed and BoJ, as well as economic data from the US and Japan. The USD/JPY's trajectory could influence cross-currency flows and hedging strategies, particularly for Gulf investors with exposure to yen-denominated assets. Technical indicators like RSI and MACD will also provide clues about the pair's near-term direction.
