Summary
The USD/JPY has returned to the psychologically important 160 level. Higher oil prices have revived US rate hike expectations on inflation concerns, and the swing from expectations of rate cuts to rate hike is being seen as a dollar-positive factor. Meanwhile, the BOJ also delivered a hawkish hold and pushed a rate hike decision back to its next meeting in June. The BOJ and Fed are moving in the same direction, but the BOJ's stance was already largely priced in, limiting the yen's upside reaction. The gap in those swings is likely to remain in focus for now, leaving room for further gains in the USD/JPY.