USD/JPY is near the highest level since 1986 as divergence with the Fed intensifies | investingLive

USD/JPY nears its highest level since 1986 as divergence with the Fed intensifies. The dollar rally followed a hawkish Fed dot plot, with the market pricing in about 38 basis points of tightening by year-end. A July rate hike now sits around 40% odds and September moves are priced in at roughly 72%. The BoJ raised its policy rate to 1.00% and signaled a pause to bond tapering from next fiscal year, while inflation data in Japan remained below the 2% target. On the daily chart, the pair broke out above 160.00 toward 162.00, with sellers around 162 before a potential pullback.