The USD/JPY forecast points North as a surge in the dollar puts the yen at the $160 level that triggered a BoJ intervention in April. Consequently, there is a lot of caution in the market as investors fear another intervention.The dollar rose Tuesday after Fed policymakers kept cautious and failed to provide clear guidance on the central bank’s rate-cut outlook. Fed’s Lisa Cook noted that the central bank was on track to cut rates, but it would all depend on incoming data. Therefore, she failed to provide a clear timing for the first rate cut.Policymakers remain hesitant to assume a more dovish tone as they await more data. This is to avoid making the same mistake they made last year. Although inflation had started a downtrend, it reversed, and they had to change their outlook completely.The next report that might give more evidence of the state of inflation is the PCE price index. Forecasts show further easing, which would support Fed rate cut expectations. Such an outcome would further weigh on the yen.Meanwhile, Bank of Japan policymakers have given hawkish signals in the past week, raising the possibility of a rate hike in July. The central bank is under a lot of pressure to raise rates due to the yen’s weakness. A weak currency pushes up import costs which drives inflation higher. A hike in July would have a big impact as it would coincide with plans to reduce bond purchases. USD/JPY key events today

 USD/JPY technical forecast: Bulls show exhaustion at the 160.00 resistance USD/JPY 4-hour chart On the technical side, the USD/JPY price has continued its rally past the 1.618 Fib extension level. Moreover, the price has stayed above the 30-SMA, showing bulls are in the lead. However, the RSI has made a bearish divergence that could lead to a reversal.The divergence indicates fading bullish momentum as the price trades near the 160.00 key resistance level. Therefore, there might be a pullback to retest the 30-SMA support. A deeper pullback would retest the 157.75 support level. However, if bulls regain momentum, the price might breach the 160.00 level to make a new high.More By This Author:USD/CAD Forecast: Falling BoC Rate Cut Bets Boost CADAUD/USD Price Analysis: Aussie Rallies on Inflation SurgeEUR/USD Price Analysis: Euro Steadies As French Elections Loom