USD/JPY Forecast: Continues its Upward Trajectory

• On Monday, the USD/JPY experienced a minor pullback in its bullish trend, but it remains a very strong currency.
• The market was relatively quiet during the trading session, which suggests that there is potential for the dollar to climb even higher.
• The next significant resistance level to watch is ¥137.50. If the dollar can break above this level, it could climb to ¥140.

In the event of a pullback, the psychologically significant level to watch is ¥135. This level was previously a resistance point, but the fact that the dollar broke above it means that there should be plenty of value hunters in that general area. The Bank of Japan is keeping interest rates low and fighting against 10-year yields rising above 50 basis points. In order to accomplish this, they will continue to print yen to buy their own bonds in Japan. If rates start to rise again, this will help the US dollar gain strength against the Japanese yen.

The trend is Starting to Change

The Japanese yen is experiencing similar treatment from other currencies, making this situation more about the yen than the dollar. By looking at the chart, it appears that the trend is starting to change, and it is likely only a matter of time before the dollar tries to reach the top again. The Bank of Japan has made it clear that it is sticking to yield curve control, and it is not likely to change its policy anytime soon. The Federal Reserve has also stated that it will stay "tighter for longer," meaning that monetary policy in the US will be much more restrictive than in many other economies around the world. This policy will make the US dollar an attractive currency to invest in.

In conclusion, the US dollar experienced a minor pullback on Monday, but it remains a strong currency. The next resistance level to watch is ¥137.50, and if the dollar can break above it, it could reach ¥140. If there is a pullback, the psychologically significant level to watch is ¥135, and there should be plenty of value hunters in that area. The Bank of Japan is keeping interest rates low to fight against 10-year yields rising above 50 basis points, which means that if rates start to rise again, it will help the US dollar gain strength against the yen. The trend appears to be changing, and it is likely only a matter of time before the dollar tries to reach the top again. The Federal Reserve's policy of staying "tighter for longer" will make the US dollar an attractive currency to invest in.