• BOJ likely to stress its resolve to keep monetary policy ultra-loose.
• Russo-Ukraine tussles weighs on the market sentiment.
• Fed speaking and expectations of an aggressive Federal Reserve rate hike boosted the greenback.

USD/JPY trades higher after BOJ’s resolve to keep monetary policy ultra loose amidst bullish sentiment surrounding dollar.

As per Reuters report on Friday, The Bank of Japan (BOJ) is likely to stress its resolve to keep monetary policy ultra-loose despite expected upward revision to inflation forecasts.

Sources further noted that the BOJ is expected to raise its fiscal 2022 inflation forecast to above 1.5% from the current 1.1% at the April meeting while downgrading the fiscal-2022 growth forecast from the current 3.8% expansion.

Downbeat market mood, a firm US dollar and and higher US Treasury yields also underpins the bullish trend for USD/JPY.

The Russo-Ukraine conflict weighs on the market sentiment and a cease-fire seems unlikely. Ukraine’s Foreign Minister stated that there had not been any progress. On the Russian side, reports emerged that Ukraine’s struck a Russian warship in the Black Sea with missiles, while Russia’s Defense Minister added that the Moskva -its flagship fleet- had sunk, meaning escalation remains.

New York Fed President John C. Williams speech also strengthened dollar. John C. Williams said that a 50 bps increase in May is a “reasonable” option, but the pace of hikes will depend on the economy. Williams reiterated what Fed’s Governor Brainard said that the Fed needs to move “expeditiously” to more normal policy levels ad above neutral.

USD/JPY 4 Hour Chart:

Support: 125.31 (S1), 124.73 (S2), 124.38 (S3).

Resistance: 126.25 (R1), 126.60 (R2), 127.18 (R3).

Amidst all the catalysts underpinning the uptrend for USD. We expect a bullish trend for USD/JPY.