Any USD/JPY dip in response to USD weakness has been very shallow. Economists at OCBC Bank expect the pair to grind higher to test the 120 mark in the coming sessions.

Topside extension

“With the pair looking to consolidate between 118.50 and 119.00, the next multi-session target may well be the 120.00 psychological level.” Note front-end US-JP yield differentials remain stretched in the USD’s favour.” 

“The BoJ downgraded Japan’s growth outlook but is now positive on inflation. However, policy rates are still expected to ‘remain at current level or lower’, so no signs of the BoJ departing from the dovish baseline.”