The USD/JPY pair is having a bit of a dance-off, oscillating within a narrow trading band near a multi-week high. The safe-haven JPY is strutting its stuff thanks to a risk-off impulse, while a softer USD is trying to keep up. But fear not, USD bulls, as bets for more Fed rate hikes are helping to limit losses and lend some support to the pair.

In fact, the markets are confident that the Fed will keep raising interest rates, with a 25 basis point lift-off in May already fully priced in. Meanwhile, the new Bank of Japan (BoJ) Governor Kazuo Ueda is singing the same old tune, stating that there’s no immediate need to review the 2013 joint statement with the government and that the central bank will maintain current monetary easing. This dovish stance may hold back traders from getting too bullish on the JPY.

Despite these diverging forces, the USD/JPY pair remains in good spirits, currently hovering around the 134.65 region, just below a five-week high reached on Wednesday. And there’s plenty of action coming up, with the release of the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Existing Home Sales data later during the early North American session. Plus, speeches by influential FOMC members and the US bond yields will add some sizzle to the USD demand and provide some impetus to the USD/JPY pair. So keep your eyes peeled for short-term opportunities!

In summary, the USD/JPY pair is like a hot salsa dance – sometimes spicy, sometimes cool, but always moving to the beat of its own drum. And with the primary keywords in mind, let’s make sure that this dance is the talk of the town, driving amazing responses from readers!

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