USD/JPY Price Forecast: US Dollar Grinds Higher on Monday

from Daily Forex. This is Christopher Lewis taking a look at the US dollar against the Japanese yen. The US dollar initially pulled back just a touch against the Japanese yen on Monday, but with Japan, Canada and US having holidays of varying intensities uh on the effect of liquidity. This is a market that is just simply drifting. We have been bullish over the last couple of weeks, but it's been more of a grind. And when I look at this chart, I can see that the 159 yen level is an area that has been important a couple of times. And therefore, I think that does make a nice target, but it also makes a bit of a barrier. If we can break above the 159 yen level, it could open up the possibility of a move to the 160.5 yen level. Short-term pullbacks invite buying as far as I can tell with interest rates in America far outpacing interest rates in Japan. The intervention that we had seen a previous uh three times in this market were designed to slow down the ascension of the US dollar or maybe more precisely the depreciation of the Japanese yen. But there's only so much that the Japanese can do. Quite frankly, the Federal Reserve is expected to raise rates between now and the end of the year at least 25 basis points more. And at the same time, Japan is more of a wait and see type of situation. They cannot raise rates too quickly because of the massive amount of debt that the country currently has. All things being equal, I remain bullish. I remain positive on the carry trade, but I recognize there might be some words here and there coming out of Japan attempting to slow things down.