The Bank of Japan decided to keep its policy rate unchanged at the latest meeting, while maintaining a slightly tighter monetary policy stance. It explicitly noted that rising oil prices triggered by the Middle East conflict are intensifying inflationary pressures. BOJ Governor Kazuo Ueda said the current board is slightly more focused on upside risks to inflation than on downside risks to economic growth. This judgment keeps market expectations for a near-term rate hike alive. He pointed out that before the outbreak of the Middle East conflict, household and corporate activities in Japan were generally robust, and government stimulus measures are expected to continue supporting the economy. However, the drag on the economy from higher oil prices through deteriorating terms of trade still needs to be assessed. The meeting kept the short-term policy rate at 0.75%. Despite this, differences remain within the bank regarding the policy path: some members advocate for further hikes to 1.0% because inflation has consistently exceeded 2%; others believe inflation may hit the target sooner than previously expected. In its statement, the BOJ emphasized that escalating tensions in the Middle East have led to volatility in global markets, and rising oil prices could continue to push up consumer inflation, thus requiring close monitoring of their impact on core inflation. Ueda further stated that the quarterly Economic and Price Outlook to be released in April will be a key observation point to determine whether the current baseline scenario remains valid or whether new risks emerge that require policy responses. On policy wording, he made it clear that if there are risks that cannot be ignored, the BOJ is likely to adjust the policy from a risk management perspective.

The daily chart reveals an upward-opening Bollinger Band with diverging moving averages for USD/JPY. Now, the price is fluctuating near the EMA12, and the MACD is about to form a death cross, although both the MACD and signal lines remain above the zero line. Upward momentum has weakened somewhat, but no reversal signal has emerged, suggesting that pullbacks could occur at any time while the overall trend remains upward. A decline toward the Bollinger Middle Band and EMA50 around 156.8 is likely. RSI stands at 55, indicating investors are largely in a wait-and-see mode. From a four-hour chart perspective, the Bollinger Band opens downward with diverging moving averages, while price oscillates lower along the EMA12 and the Bollinger Lower Band. Even as price reaches new highs, upward momentum gradually weakens—a sign of bearish divergence—and no bottoming or reversal has yet appeared. RSI is at 42, with progressively lower highs, reflecting a pessimistic market sentiment. A short-then-long strategy is recommended.

Trading direction: Buy

Entry Price: 157.5

Target Price: 161

Stop Loss: 156

Support: 158/157/155

Resistance: 160/161/162