The USD/JPY exchange rate rose sharply last week following the release of US employment statistics and ahead of comments from the incoming new governor of the Bank of Japan (BOJ).

However, worsening economic indicators released this week in the US have raised concerns that there could be a sell-off of the dollar and a rise in the yen.

There are also fears the US economy may overheat due to financial tightening. Therefore, investors are closely watching future US economic indicators.

Statements by the new Bank of Japan governor Kazuo Ueda may also have an impact on the USD/JPY exchange rate.

The 71-year-old Ueda, who began his tenure as head of the Japanese central bank on April 9, said he would work to meet the BOJ’s two per cent inflation target.

“Achieving financial system stability is a big responsibility for the BOJ. As the environment surrounding Japan’s banking system becomes more severe, it’s extremely important to ensure Japan’s financial intermediation is functioning smoothly,” Ueda said, according to Reuters.

It will be necessary to take into account the expectations of market participants when assessing the statements made by the new Bank of Japan governor.

The outlook for the USD/JPY currency pairing is also being closely monitored.

Although it briefly soared, there is resistance at the top of the Ichimoku Cloud (134.07), which could make further gains difficult and increase the risk of a downturn.

Taking all these factors into consideration, today’s expected range is 132.240 to 135.230.

Investor attention is focused on a series of US economic indicators to be released this week. If these indicators fall below expectations, there is a high probability of a sell-off of the dollar and a rise in the yen.

Investors should pay attention to the US NFIB Small Business Optimism Index for March, the Redbook Retail Sales report and the speech by Chicago Federal Reserve Bank president Austan D Goolsbee.