Japan’s persistent core inflation and rising bond yields indicate that the Bank of Japan (BoJ) may consider another rate hike. This scenario raises alarms for USD/JPY bulls as indicators shift towards bearish sentiments.

Traders are left questioning whether the markets are underestimating the potential recovery of the yen. Japan’s inflation hitting unexpected levels adds pressure on the BoJ to align its policies with the economic environment adequately.

With technical indicators suggesting trends are likely to move in favor of the yen, market participants must remain attentive. Strategic adjustments may be necessary to navigate this evolving landscape, aligning strategies with shifts in monetary policy expectations.