USD/JPY is advancing towards the three-month high of 150.80, fueled by renewed pressure on the Japanese Yen after Bank of Japan (BoJ) Governor Kazuo Ueda expressed caution about exiting the dovish policy stance. Despite recent comments from BoJ board member Hajime Takata suggesting an overhaul, Ueda emphasized the need for further wage growth data to confirm sustained inflation above the 2% target.
Meanwhile, the US Dollar faces headwinds as expectations for June rate cuts by the Federal Reserve (Fed) remain firm. Investor anticipation of potential easing triggers liquidity outflows from the Dollar. This week’s focus centers on Fed Chair Jerome Powell’s testimony before Congress on Wednesday and Thursday. Traders will be closely watching for any signals reinforcing Powell’s previously stated intention to maintain current interest rates until further evidence of disinflation. Wednesday’s US Automatic Data Processing (ADP) Employment Change data for February could further shape market expectations for the Fed’s policy trajectory.