Then Bank of Japan is set to maintain a dovish stance this week. At the same time, the Federal Reserve is set to continue its hiking cycle. Thus, the USD/JPY pair could extend its upmove, economists at Commerzbank report.

Prices in Japan continue to rise

“The BoJ is likely to be the only G10 central bank to leave its ultra-expansionary monetary policy unchanged this week. This is despite the fact that prices in Japan are also rising at an increasingly rapid pace. As a result, criticism of Japan's monetary policy is likely to grow louder and downward pressure on the JPY will remain high.”

“If the Fed acts decisively again tomorrow, USD/JPY could continue to trend upward. After all, the differences in monetary policies are simply too striking.”