USD/JPY gathers strength for a rally above 144.00 as BoJ needs to remain dovish further

• USD/JPY is making efforts for a range expansion as BoJ to remain dovish.
• S&P500 futures have added significant gains as investors are digesting fears associated with expectations of higher interest rates from the Fed.
• The US Dollar Index is oscillating around the immediate support of 102.60 ahead of US Durable Goods Orders.

The USD/JPY pair is demonstrating back-and-forth action around 143.50 in the early European session. The asset is expected to deliver a strong upside above 144.00 as investors are hoping that the Bank of Japan (BoJ) will continue to keep the monetary policy dovish in order to attain sustainable 2% inflation.

S&P500 futures have added significant gains in the Asian session as investors are digesting fears associated with expectations of higher interest rates from the Federal Reserve (Fed). US equities faced selling pressure on Monday amid caution inspired by the upcoming quarterly result season. Investors are worried that higher interest rates by the Federal Reserve (Fed) are weighing heavily on economic prospects, which could impact quarterly numbers.

The US Dollar Index (DXY) is oscillating around the immediate support of 102.60. A power-pack action is expected in the USD Index ahead of the release of the United States Durable Goods Orders data (May). As per the consensus, the economic data is seen contracting by 1.0% vs. an expansion of 1.1%. Durable Goods Orders excluding defense is seen stagnant against a contraction of 0.7%.

Scrutiny of the forward economic data indicates that fewer defense orders are going to impact the economic data.

Contrary to the USD Index, the 10-year US Treasury yields have rebounded firmly to 3.74% as investors are hoping that the Fed will continue lifting interest rates as the journey towards 2% inflation is far from over.

Meanwhile, the Japanese Yen is likely to dance to the tunes of the speech from BoJ Governor Kazuo Ueda. A dovish stance is expected from BoJ Ueda as the impact of higher import prices is fading away and the central bank is needed to elevate demand through firmer wages to keep inflation stably above 2%.