USD/JPY Tests Key Yearly Resistance Amid Cooling Japan Inflation

Japan's annual core CPI slowed to 2%, marking its lowest level in a year and reducing the immediate pressure on the Bank of Japan (BOJ) to hike rates. This fundamental weakness in the Yen has pushed the USD/JPY pair to test a technically significant resistance zone at the yearly open. Additionally, the price has reached a key retracement level within the year-to-date (YTD) range, marking a decisive moment for the pair's trajectory. While the Federal Reserve's (Fed) steady stance continues to support the US Dollar, technical hurdles could slow the pair's ascent. Market participants are closely watching these levels to see if the bullish momentum can overcome the yearly resistance. The widening interest rate gap remains the primary driver, but technical consolidation is now a key factor.