The Deputy Governor of the Bank of Japan (BOJ), Shinichi Uchida, recently indicated that if economic and inflation trends align with the central bank's projections, the BOJ will proceed with further monetary tightening. He reiterated that despite tariffs imposed by the U.S. exerting some pressure on Japanese exports, domestic business sentiment has improved, suggesting the conditions for additional rate hikes are emerging. Shinichi Uchida emphasized that the central bank will adopt a cautious approach based on actual economic and price developments, avoiding predetermined policy trajectories. He also noted that due to trade policy influences, global economic and inflationary trajectories remain highly uncertain, necessitating close monitoring of their potential impacts on financial markets, foreign exchange rates, and the Japanese economy. Previously, Governor Kazuo Ueda also underscored the importance of prudence when raising borrowing costs, ensuring that inflation is primarily driven by wage growth and domestic demand expansion. In January, the BOJ concluded its decade-long quantitative easing program, raising interest rates to 0.5%, marking a significant shift in monetary policy stance. At the September monetary policy meeting, two members advocated for interest rate hikes but failed to secure majority support, reflecting escalating internal concerns within the BOJ regarding inflationary pressures. This has further heightened market expectations of a potential rate increase in October. Reports indicate that Sanae Takaichi has secured key political backing, positioning her as a likely candidate for Japan's next Prime Minister, which has bolstered expectations of continued large-scale fiscal expenditure and accommodative monetary policy by the BOJ. Traders anticipate that the BOJ will further delay interest rate hikes, leading to a depreciation of the yen and providing favorable conditions for cross-currency pairs.

Due to Congress's failure to pass appropriations legislation in a timely manner, the U.S. federal judiciary will begin discretionary budget reductions and employee furloughs starting this Monday. Funding allocated for operational expenses has been exhausted, marking the first such occurrence in nearly three decades. Reports indicate that during the government shutdown, approximately 30,000 federal judicial system employees are affected, with some furloughed and others required to work without pay. Consequently, civil litigation involving federal agencies is experiencing widespread delays. Despite this, numerous judges presiding over litigation related to President Donald Trump's policies have repeatedly dismissed government motions to stay proceedings. The judicial branch previously relied on contingency funds not requiring congressional approval to sustain operations, but financial pressures have intensified. Funds available during this shutdown are below the levels seen during the 2019 Trump administration shutdown and are projected to be exhausted by this Friday. Due to constitutional prohibitions against reducing judicial salaries, courts remain operational, with judges and Supreme Court justices continuing to receive compensation. Court officials nationwide have indicated that jury payments can still be maintained at this time.

In the 1D timeframe, the Bollinger Bands are expanding upward with the SMAs diverging positively; however, after breaking above the ascending trendline, a pullback has occurred. Currently, the price is trading near the EMA12, with the MACD forming a death cross, indicating the possibility of further correction. The RSI stands at 55, entering a neutral zone, reflecting market indecision. If the price maintains above the 150 level, it may rally toward the previous high around 158.8; failure to hold this level could lead to a decline toward 148-149. In the 4H timeframe, the Bollinger Bands are contracting downward, with the SMAs diverging negatively. The MACD has formed a golden cross below the zero line, with the MACD line and signal line approaching the zero-axis, suggesting the rebound is ongoing. The RSI is at 47, indicating a slight reduction in bearish sentiment. If the price can hold above the EMA50 and the middle Bollinger Band, a retest of 153.2 is possible; otherwise, a retracement toward the EMA200 near 149.2 may occur. It is recommended to go long at the lows in the short term.

Trading Direction: Buy

Entry Price: 150.72

Target Price: 158.8

Stop Loss: 148

Support: 150, 148.5, 146.6

Resistance: 155, 156.7, 158.8