The USD/JPY pair attracted buyers around the 143 mark on Wednesday. Currently, prices seem ready to continue their recent upward trajectory.
Despite the warnings from Japanese authorities about the possibility of intervention to stop the losses of the national currency, expectations that the Bank of Japan will maintain a dovish stance are undermining the Japanese yen, thus providing support for the USD/JPY pair.
Recall that Bank of Japan Governor Kazuo Ueda recently ruled out the possibility of changes in the ultra-loose monetary policy. He also stated that he has no plans to change the measures controlling the yield curve.
Such a position is completely opposite to the hawkish stance of the Federal Reserve, which announced that borrowing costs should increase by an additional 50 basis points by the end of the year. Additionally, the Bank of Japan's position contrasts with other major central banks.
This, in turn, helps the U.S. dollar gain some positive momentum in the USD/JPY pair.
However, despite these developments, one should not forget about corrective movements ahead of the publication of the U.S. Personal Consumption Expenditures (PCE) Price Index—the preferred inflation indicator of the Federal Reserve, which will be released on Friday.
The aforementioned fundamental backdrop appears to strongly favor bullish traders. Therefore, any significant corrective decline is likely to be short-lived and can be seen as a buying opportunity.
