Dovish BoJ Hike Sends USD/JPY Surging Over 1%

The US dollar maintained its support into the final hours of an action-packed week. The Fed's hawkish stance initially rallied the dollar, but it later sold off before bouncing back again. However, the focus shifted to the Bank of Japan, which delivered a dovish hike despite raising rates by 25 basis points as expected.

The BoJ's 7-2 vote and lackluster guidance were enough to knock the yen lower, causing USD/JPY pairs to surge across the board. The pair surged over 1% to climb above 158.00, testing the key area of resistance between 158.00 to 158.50.

The pressure remains on the currency, and if USD/JPY breaks through this resistance, a revisit of the 160.00 handle could be on the cards again. Support comes in at 156.30 to around 157.00.