The yen remains under pressure after the BoJ hike
USD/JPY has continued to climb even after the Bank of Japan raised interest rates by 25 basis points during the week ending 19 June. That reaction suggests investors are still treating the Japanese yen as vulnerable against the US dollar, despite the latest step towards tighter policy in Japan.
The reason is that markets are not yet pricing a sustained BoJ tightening cycle. According to the TradingView analysis, only about a 70% chance of one additional increase by December is currently priced in. That leaves the yen exposed if traders conclude that Japanese policy will remain comparatively cautious.
US rate expectations are keeping the dollar supported
The US side of the rate story is moving in the opposite direction. The source notes that Fed funds futures are now pricing close to a 90% probability of a Federal Reserve rate hike by the end of 2026, reinforcing the view that US rates could remain relatively attractive.
For USD/JPY, that matters because the pair is highly sensitive to the gap between US and Japanese yields. If investors continue to expect a wider US-Japan rate differential, the dollar may retain support even when the BoJ tightens gradually.
The July 2024 high is the next technical test
The chart now puts the July 2024 high back in focus. The TradingView source identifies the key resistance area near 161.75, with USD/JPY trading close enough to make that level the immediate test for the uptrend.
