USD/JPY could soar as Japan struggles to halt gains
April 25 (Reuters) -USD/JPY is on track to eventually soar to test the 160 psychological level despite Japanese authorities' concerns over a weakening yen, as fundamental factors continue to hurt the yen.
The authorities are facing renewed pressure to combat a sustained depreciation in the yen, as traders drive down the currency on expectations that any further interest rate hikes by the Bank of Japan will be slow in forthcoming.
Yen weakness is likely to force BOJ Governor Kazuo Ueda to walk a delicate line in guiding monetary policy this week as he tries to maintain a calibrated path to exiting ultra-easy rates without upending the currency.
The yen hit fresh 34-year low versus the dollar and a 16-year low against the euro on Thursday as investors expect a BOJ policy meeting that ends on Friday may not be hawkish enough to support the Japanese currency.
USD/JPY's recent weekly close above the 152.60 Fibo, a 38.2% retrace of the major 277.65 to 75.31 (1982 to 2011) drop, adds to the likelihood of much bigger gains.
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Weekly Chart: https://tmsnrt.rs/3UuPF1s
(Martin Miller is a Reuters market analyst. The views expressed are his own)
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