USD/JPY eyes breakout as BOJ decision approaches
USD/JPY is testing the top of its recent range ahead of the Bank of Japan meeting, with markets watching for any dovish signal that could send the pair back towards the 160 to 162 area.
Founder, Mott Capital Management
The Bank of Japan may not move this week, but July is coming into focus
A Bank of Japan rate decision is expected on 28 April. No change is widely anticipated at this week's meeting, but markets are increasingly pricing in the possibility of a rate hike around July. With oil prices rising again and inflation pressures building, investors will be listening closely for any signal about when the Bank of Japan may be ready to act next.
A dovish tone could put renewed pressure on the yen
If the BoJ strikes a dovish tone, that would likely be negative for the yen and could push USD/JPY higher out of its recent consolidation range. The pair could then begin moving back towards the highs seen in the summer of 2024, when it traded near 162. The 160 level remains especially sensitive because Japanese officials have previously signalled discomfort there and the threat of intervention is still a live consideration for the market.
The chart points to a possible bullish breakout
A dovish BoJ meeting and press conference may give traders a reason to test those upper levels. From a technical perspective, the chart suggests a potential bull flag has formed, which would support the case for another leg higher from the current region around 159. If that interpretation is correct, the next meaningful target may be the 162 area.
Source: TradingView, 27 April 2026
Momentum is improving, but the BoJ will decide the next move
The relative strength index has also been trending higher and has spent the last few days consolidating, which suggests bullish momentum may be building again. Markets will be watching the BoJ closely, and anything seen as neutral or dovish that pushes rate-hike expectations further out could become the catalyst for USD/JPY's next major move higher.
USD/CAD gains after cooler CPI, eyes further upside
USD/CAD is edging higher after softer Canadian CPI reduced expectations for a Bank of Canada rate hike later this year. The pair is trying to turn up from an important support zone, although oil prices and momentum signals may still decide whether the move can extend.
Brent oil nears key technical level
Brent oil is testing an important support area around $94, leaving the market at a technical crossroads. If that level continues to hold, Brent could rebound towards the converging short-term moving averages and potentially extend higher, but a break below support would weaken the outlook materially.
