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USD/JPY Keeps a Bullish Tone as Geopolitical Risk Lifts the Dollar

USD/JPY is holding near 162.40 after the Japanese yen weakened on escalating US-Iran tensions and rising concerns over Strait of Hormuz disruption. Higher oil prices are supporting the US dollar, while the market now waits for June US CPI data to see whether inflation pressures strengthen the case for further dollar gains.

Market chart and macro headlines for USD/JPY this week

What is driving USD/JPY right now?

The pair advanced as investors reacted to renewed energy-supply fears and a broader safe-haven demand bid for the greenback. The latest backdrop also includes a US monthly budget statement due on July 13, though the actual reading was unavailable at the time of writing.

On the macro side, the market is focused on June US CPI and the dollar ahead of CPI backdrop. Headline inflation is expected to cool, but the key question is whether stronger energy prices keep core pressures sticky enough to support the dollar.

Technical picture remains constructive above short-term support

USD/JPY remains in a short-term bullish structure above the 20-period and 100-period simple moving averages on the 4-hour chart. The pair is trading around 162.46, with immediate resistance near 162.47.

If buyers push through 162.47, the next leg higher could develop. On the downside, support is seen near 162.41, then 162.33 and 162.26, with deeper support at 162.14 and 161.89.

Key levels traders are watching

The current setup suggests that momentum remains positive, but the pair is also close to levels where intervention risk can start to rise. That means traders should watch price action carefully if USD/JPY continues to climb above 162.

A softer-than-expected CPI reading could weaken the dollar and cap upside. However, if inflation remains firm amid higher oil prices, USD/JPY may continue to attract bullish flows. For context on the oil backdrop, see Strait of Hormuz.

What this means for retail traders

For forex traders, USD/JPY is currently a market driven by both macro headlines and technical follow-through. Geopolitical escalation is supporting the dollar now, but the next major catalyst is likely the US inflation print and any follow-through from Fed minutes pullback risk.

Risk management matters here because the pair is already trading near elevated levels, and any surprise from CPI or a de-escalation in Middle East tensions could quickly change sentiment. Automated trading tools and a disciplined forex trading bot can help traders monitor these fast-moving conditions more efficiently.

Outlook

USD/JPY stays biased to the upside while oil prices remain firm and safe-haven demand for the US dollar persists. A break above 162.47 would strengthen the bullish case, while a softer CPI outcome could trigger a short-term correction.