Forex Forecast Watch: Fed-BoJ Policy Gap Drives USD/JPY Risk

The core theme running through current forex forecasts for USD/JPY is policy divergence. A hawkish Fed hike has reinforced the dollar's yield edge just as Japan approaches a widely expected but modest BoJ rate adjustment, keeping the interest rate gap wide enough to favor dollar strength.

This divergence explains why USD/JPY has climbed toward the 156.13/50 zone despite building bearish RSI divergence on the charts. Forecasters note that technical warning signs often lag fundamental drivers, meaning the pair could still probe higher before any correction takes hold.

A decisive break below 155.45 would be the clearest signal that the divergence narrative is losing steam, opening the door to a broader reassessment of near-term forex forecasts for the pair.