USDJPY is on the rise again, moving towards 157

USDJPY has rebounded from ~3.3% drop caused by the Bank of Japan's yen buying intervention.

Last week we warned you (here >> USDJPY hits highest since 1990! What’s next?) about the strong potential for the Bank of Japan to take the necessary measures to stabilize the decline of its national currency, which at the time of writing has depreciated by ~10.9% since the beginning of the year.
 

Although the Yen's depreciation against the USD has been temporarily reversed, further action could be in store if the pair again touches the 160 psychological level.
 

Although the weaker Yen helps local exporters, it also contributes to inflationary risks as import costs rise.

In its recent history, Japan has already made 3 interventions. All three supportive actions were carried out in 2022, with an estimated $60 billion spent to defend the national currency.
 

Another intervention by the BoJ could potentially drag the USDJPY lower towards
the 155 round number.
 

A more hawkish stance from the BOJ and/or lower interest rates in the U.S. could also provide much needed support for the JPY.
 

On the macroeconomic side ...

Japan's unemployment rate came in at 2.6% (vs. 2.5% expected), while industrial production rose to 3.8% (vs. 3.4% expected).

Despite the higher-than-expected unemployment numbers, which could potentially contribute to a more hawkish stance from the BoJ on it's monetary policy, the USDJPY has been lifted towards the 160 level.  

On the technical side…

USDJPY is trading above the key simple moving averages (21, 50 & 100-period moving averages) underscoring the strong bullish trend.

To the upside the key resistance level may be located at 160 while to the downside the 155 round number may provide an immediate support if the JPY bulls regain the initiative.

Despite the SMA’s bullish position, the relative strength index (RSI) is signaling a potential for a technical pullback. (<30 – oversold; >70 – overbought).

A consolidation pattern may form within the 155.000 – 158.440 as investors await for more macro-economic news and/BoJ further action which may come in the form of another intervention or potential policy tightening.