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The USD/JPY pair paused midweek after a series of gains, currently trading at 157.59. The Japanese yen remains under pressure as the US dollar strengthens, driven by concerns over prolonged Middle East conflicts keeping energy prices high and inflation risks elevated. Market expectations for Federal Reserve rate decisions have also shifted, influencing the pair's trajectory. Traders are closely monitoring these dynamics, as a stronger USD typically weakens the yen, impacting carry trade strategies and cross-currency flows. The pair's technical setup suggests potential for renewed upward momentum, with key resistance levels likely to be tested in the coming weeks. For investors, the interplay between geopolitical tensions, energy markets, and central bank policies will be critical in shaping USD/JPY's short-to-medium-term direction. Key focus areas include the Fed's policy stance, regional stability in the Middle East, and Japan's monetary policy response to inflationary pressures.
