The Bank of Japan is following an uber-dovish monetary policy approach, with negative rates and yield curve control (YCC), contrary to its major counterparts. Governor Ueda had so far shown no inclination to stray away from that, but he opened the door to an exit form negative rates, speaking to The Yomiuri Shimbun over the weekend. 
His hawkish remarks sent USD/JPY lower on Monday, creating risk for a deeper pullback towards this month's lows (144.43), as the pair continues to trade at the levels that had sparked last September's FX intervention (dashed line) by Japanese authorities. However, sustained weakness does look easy at this stage.
The stark monetary policy differential between the central banks of Japan and the US that has fueled the pair's rally remains intact for now, even though the Fed is widely anticipated to stay on the sidelines next week. Governor Ueda may have opened the door to an eventual hike, but did not suggest any imminent shift in the ultra-loose setting.
As such, USD/JPY regains its composure today and the upside bias is intact above the EMA200 (145.10-20). The road to new 2023 highs towards 148.83 remains open, although it may be early to talk about further gains at this stage. Wednesday's US CPI inflation update looms and is likely to determine the next leg of the move.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 21 Feb 2024 https://japannews.yomiuri.co.jp/business/economy/20230909-135487/