The pair hit highs last seen in 1998. The bull rally is set to continue as long as the monetary divergence between Japan and US is in place. Inflationary pressures are arising from the Yen’s decline. Today’s USD/JPY forecast is bullish. As the United States tightened its monetary policy faster and increased the gap with Japan’s stubbornly low interest rates, the dollar reached a new 24-year high against the rate-sensitive Japanese yen. –Are you interested in learning more about forex signals? Check our detailed guide- The Yen hit its lowest point since 1998 at 140.97 and last traded at 140.91 per dollar. “After we saw the break of 140 … the momentum was skewed for yen weakness,” said Galvin Chia, an emerging markets strategist at NatWest Markets. “So long as (yield curve control) is in play, and so long as interest rate divergence is in place, one of those side effects would be a weaker yen.” The Yen is sensitive to increases in yields overseas because the Bank of Japan is intervening in the markets to keep government bond yields in check. The benchmark 10-year yield in the US recently stood at 3.2576%, up from its finish on Friday of 3.191%. Despite a rise in COVID-19 cases, household expenditure in Japan increased for a second consecutive month in July. However, inflationary pressures brought on by the Yen’s decline to a 24-year low have raised doubts about a recovery in consumption. This week’s figures have seen private consumption slowing, weakening some of the gains made in April-June due to declining real earnings and service sector activity. “Rising prices without wage growth can be an obstacle to the private consumption recovery in the next six months,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute. USD/JPY key events today The Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers’ Index (PMI) report from the US is expected to drop from 56.7 to 55.1. Get FREE Forex Signals Now! USD/JPY technical forecast: Bulls dominate in the overbought region Looking at the 4-hour chart, we see the price trading well above the 30-SMA and RSI in the overbought region. A distinguishing characteristic of strong bullish trends is RSI readings above 70. It shows bulls are strong enough to push the price to extreme levels. –Are you interested in learning more about day trading brokers? Check our detailed guide- The price has broken above 141.002, a psychological level. It will most likely hit the next psychological level before retesting 141.002. Looking to trade forex now? Invest at eToro! Trade Forex Now! 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Saqib Iqbal Saqib Iqbal Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis. View All Post By Saqib Iqbal Majors share Read Next GBP/USD Price Pauses Upside by 1.16 Ahead of US Services ISM Data Olimpiu Tuns 2 weeks The pair hit highs last seen in 1998. The bull rally is set to continue as long as the monetary divergence between Japan and US is in place. Inflationary pressures are arising from the Yen's decline. Today's USD/JPY forecast is bullish. As the United States tightened its monetary policy faster and increased the gap with Japan's stubbornly low interest rates, the dollar reached a new 24-year high against the rate-sensitive Japanese yen. –Are you interested in learning more about forex signals? Check our detailed guide- The Yen hit its lowest point since 1998 at 140.97 and last traded at 140.91… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.