USD/JPY: Hawkish BOJ risks at multi‑decade highs – DBS

FXStreet Insights Team FXStreet

DBS Group Research’s Philip Wee warns that caution is warranted on USD/JPY as the pair trades near the 159–160 resistance zone after Operation Epic Fury. He expects the Bank of Japan to deliver a hawkish hold on March 19, distinguishing temporary supply-led inflation from demand-pull pressures. A successful Trump–Xi summit could de-escalate Iran tensions, cool Oil prices and undermine the current USD/JPY floor.

BOJ normalization risk at key resistance

"Caution is warranted with USD/JPY at the year's high after Operation Epic Fury, as the pair tests the psychologically significant 159-160 resistance zone amid a dense "geopolitical cloud." While the flight to safety and surging energy costs have favoured the USD over the JPY, the Bank of Japan is expected to deliver a hawkish hold at its March 19 meeting to maintain its path of interest rate normalization."

"By distinguishing between temporary supply-led inflation driven by the Strait of Hormuz chokepoint and the sustainable demand-pull inflation signalled by robust Shunto wage increases, BOJ Governor Kazuo Ueda may also be waiting for a potential diplomatic off-ramp on Iran during US President Donald Trump’s visit to China on March 31-April 2."

"If the Trump-Xi summit successfully de-escalates the Iran conflict and cools oil prices, the current fundamental floor for USD/JPY could give way, making any aggressive long positions at these multi-decade highs particularly vulnerable to both a shift in sentiment and the ever-present threat of Japanese Ministry of Finance intervention."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD bounces off multi-month low, nears 0.6900

AUD/USD edges higher toward 0.6900 in the Asian session on Wednesday, recovering some of the previous day’s losses to its lowest level since March as the US Dollar stalls the hot US CPI-inspired rally amid hopes of a US-Iran peace deal. Meanwhile, hawkish comments from FOMC members have almost confirmed another December rate hike, which favors USD bulls and should cap the Aussie.

USD/JPY remains capped below 159.00 amid looming intervention risks

USD/JPY struggles to build on the previous day’s strong gains to a near one-month top as intervention risk supports the Japanese Yen while hopes of a US-Iran peace deal cap the safe-haven US Dollar. That keeps the pair's upside limited below 159.00, for now.

Gold puts the $4,000 mark to the test

Gold now accelerates its daily correction, challenging the key $4,000 mark per troy ounce on Wednesday. The precious metal’s continuation of the downward trend comes against the backdrop of a robust performance of the US Dollar, rising US Treasury yields across the board and rising bets of extra rate hikes by the Fed.

Pump.fun Price Forecast: PUMP rises despite subdued retail demand

Pump.fun (PUMP) gains momentum on Wednesday, trading at $0.0036. The meme coin launchpad native token is up over 2% on the day, after testing lows around $0.0035. More broadly, the technical picture remains bearish, with key indicators such as the Moving Average Convergence Divergence (MACD) stuck in negative territory.

Ten questions for China in 2027

2026 has been a year of slowing growth and increasing divergence within China's economy. We saw the gap between external and domestic demand, as well as between the new economy and the old economy, widen significantly. Here, we look ahead to the key questions facing China in 2027.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.